^*OCBC Precious Metals Account allows purchase or sale of only non-physical precious metals.

Article Summary

• Gold and silver are typically driven by different factors than stocks and bonds. As such, during periods of market gains or declines, holding precious metals can help smooth fluctuations in an overall portfolio.
• Beyond just a crisis or inflation hedge, gold is traditionally seen as a reliable store of value.
• Silver benefits from its dual role as both a precious and industrial metal, with firm demand from sectors like solar, electric vehicles, and electronics underpinning its real consumption.
• Precious metals were the top-performing asset class in 2025, with gold appreciating by 64.6% and silver by 147.9%, according to Bloomberg data¹.
• It’s easy to add gold and silver to diversify your portfolio. Just open a Precious Metals Account on the OCBC App.

While equity markets have done well so far this year, it is still unwise to rely on equities alone. Assets like gold and silver can help diversify your portfolio and manage downside risks, especially when markets become uncertain.

While their relationship has become more complex in recent years, gold and silver continue to demonstrate low correlation with stocks and bonds over multi-year periods, supporting their role as portfolio diversifiers.

Gold experienced its strongest rally and biggest annual gain in more than four decades in 2025, rising more than 60%, according to Bloomberg data¹. Year-to-date (as of 11 May 2026), gold is up 7.6%, while silver has gained 6.3%².

Interested? Here are four key pointers to take note of as an investor:

1. Beyond stocks and bonds

   Spreading investments across different asset classes, markets, sectors and industries can help reduce the drag of potential underperformance in any single investment. This approach can be strengthened by adding investments that do not move in the same direction as the rest of the portfolio.

   For example, if you’re only invested in tech stocks, the overall performance of your portfolio would be heavily influenced by how the sector is performing. This may not be ideal. After all, markets are made up of many different companies operating across various parts of the economy. Different sectors perform differently depending on a range of factors.

   As such, portfolios should be diversified so that investments are not all influenced by the same drivers. They should comprise a mix of asset classes across various markets and sectors, so that losses during a bad day in one area are buffered by gains in another part of the portfolio.

   Gold and silver are often favoured for this reason, as they traditionally do not move in the same direction as stocks and bonds. In fact, investors are rethinking the role of gold and silver in portfolios today. Gold’s deep liquidity and role in mitigating geopolitical and inflation risks are prompting investors to treat it as a strategic, long term holding signalling a broader shift in portfolio construction³.

2. They don’t just look pretty

   These precious metals offer more than just ornamental value.

   They also serve as industrial metals, acting as key raw materials to produce certain goods, with prices influenced by underlying supply and demand factors.

   For example, silver is widely used for the manufacturing of solar cells, batteries and even medicine. Approximately 60% of silver’s global demand is believed to be from its industrial use. Even gold, while not a major industrial metal, is still used in select industrial applications, especially in electronics.

   The rise of emerging economies may ramp up demand for industrial metals. As mining volumes fade, this will also limit the supply of these metals and could support prices in the long run.

3. Gold glitters during uncertainty

   Global geopolitical tensions have helped support demand for precious metals.

   Furthermore, a softer US Dollar or renewed hopes of Federal Reserve rate cuts could serve as catalysts for further price upside should tensions abate.

4. Central bank demand

   Gold is held by central banks around the world. It is a reliable store of value and is highly liquid, which means it can be readily sold for cash when necessary. A 2025 survey of 70 central banks by the World Gold Council found that 95% of respondents expect global central bank gold holdings to increase, while 43% plan to raise their own allocations to help mitigate geopolitical and inflation risks⁴.

   Central banks are diversifying their reserves away from heavily indebted fiat currencies, while also seeking to reduce vulnerability to the US dollar as a tool of leverage in trade and geopolitics.

   Over the long-term, this trend of de-dollarisation is expected to drive continued central bank buying, providing support for gold prices, even after global tensions ease.

   While central bank purchases are not a direct driver of silver demand, silver can benefit indirectly from gold’s strength due to its correlation with gold prices, as well as its dual role as both a precious metal and an industrial commodity.

Your first pot of gold and silver

Investors looking to diversify their portfolio may consider precious metals as an asset class.

To add gold and silver as part of a diversified portfolio, investors can open a Precious Metals Account on the OCBC App. Transactions are conducted digitally, with no storage charge or custody fee, and without holding physical metals. Investors can start with relatively low entry amounts, subject to prevailing market prices, and conveniently gain exposure to precious metals as part of their broader wealth management strategy.

Like all investments, investments in precious metals come with risks. Gold and silver are worthwhile investments in a portfolio, but investors should be aware that prices of precious metals can be volatile. Investors must do their own research before making decisions and invest accordingly to their risk appetites.

References:

1. Source: Bloomberg. Data as of 31 December 2025.

2. Source: Bloomberg. Data as of 11 May 2026.

3. Source: OCBC Group Research. “Gold – Revising forecast” Published 26 January 2026.

4. Source: World Gold Council. “Central Bank Gold Reserves Survey 2025.” Published 17 June 2025.