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By Will Hubbard
Christmas may be a month behind us, but Yukon Cornelius—the legendary prospector from “Rudolph the Red-Nosed Reindeer”—would be pretty ecstatic about what’s happening in silver and gold right now. And he wouldn’t be alone.
Market attention has shifted away from the major stock indexes and toward precious metals—first gold, and now, very clearly, silver.
A historic move in precious metals
With silver up roughly 145% and gold up around 65% last year, both metals are posting their strongest performances since 1979. Record after record is falling, while Wall Street forecasts seem to become outdated almost as soon as they’re published.
Gold ended last year around $4,325 per ounce. As I write this, it sits just over $5,000 an ounce. Silver did even better, finishing the year near $45 per ounce before pushing past $90 this month.
Silver, in particular, appears to be in what traders call a “price discovery phase,” a period with few historical reference points to slow momentum. The market is simply trying to determine, in real time, what it’s worth.
The last time precious metals captured this much attention was around 2011, when investors were fixated on whether silver could break $50 an ounce. After that, both gold and silver went relatively quiet for years, with renewed interest emerging only in the post-COVID period.
Forecasters left behind
Analysts missed this move badly.
In the London Bullion Market Association’s annual Precious Metals Forecast Survey, the average analyst forecast for gold’s 2025 price came in almost $700 below the metal’s actual average price for the year—a record miss in both dollar and percentage terms. They also underestimated silver’s average 2025 price by roughly $8 per ounce.
Now those same analysts have released their 2026 predictions, and they’re the most bullish on record, with gold targets near $4,750 and silver approaching $80. Yet, as of now, prices have already exceeded both.
These forecasts reflect annual averages, so prices may still settle. Even so, the message is clear: momentum has been stronger than anyone expected.
What is this rally telling us beyond the price tag?
I think it reflects something deeper about how investors view risk today. When gold and silver rise together, and silver outperforms by this kind of margin, it suggests investors aren’t just seeking safety. They’re also positioning for industrial demand growth and expressing concern about long-term confidence in fiat currencies.
The gold-to-silver ratio has compressed significantly, according to Kavout. Historically, when this ratio falls, it often signals a mix of optimism about growth (which supports silver’s industrial role) and ongoing concern about monetary stability (which supports gold).
Don’t let FOMO test your discipline
This is where the conversation gets uncomfortable.
When an asset doubles or triples in a year, the mathematics of future returns changes. The upside for silver at $90 is fundamentally different from the upside at $30.
Recently, Flexible Plan Investment’s (FPI’s) president, founder, and chief investment officer Jerry Wagner wrote about the three types of risks that surround investors on a daily basis. With gold and silver, we’re starting to see a probable risk of a pullback show up in quantitative models. Analysts at Société Générale have flagged silver as potentially entering bubble territory.
Even in a rally supported by fundamentals, sentiment can become overheated. Fear of missing out (FOMO) becomes a powerful driver.
That’s when investors see the headlines and think, I’ve got to own silver.
When enthusiasm runs ahead of fundamentals
Signs of speculative excess are starting to appear.
Nearly half of all ETF inflows into silver funds occurred in the final month of 2025 as prices accelerated. Physical silver premiums in Shanghai have run $8 to $10 above London prices—the widest spread on record. These kinds of dislocations tend to happen late in fast-moving markets.
Silver is often described as “gold on steroids.” It’s smaller, more volatile, and serves a dual role as both an industrial input and a store of value. That combination creates explosive upside potential, but also sharper downturn risk.
History is instructive. In 1980, silver reached $50 during a speculative bubble, collapsed below $5, and took more than three decades to reclaim that high. That is the trap of chasing exponential moves. Psychologically, it becomes easy to believe the trend will continue forever.
Risk matters more as prices rise
Sometimes fundamentals do justify higher prices. But that doesn’t mean buying at any price is prudent.
Silver at $90 could go to $180—but it could also pull back 20% or 50% along the way. As prices climb, managing risk becomes increasingly important.
So how should investors think about precious metals in 2026?
First, acknowledge what you don’t know. Nobody knows whether silver will hit $120, fall back to $60, or run higher before any meaningful correction. Forecasts are guesses, even when they are informed guesses.
Second, consider portfolio balance. If commodities were meant to be a 5% allocation, make sure this rally hasn’t quietly turned that into 8% or 10%. Rebalancing remains one of the most effective tools for managing concentration risk.
Lastly, focus on rule-based discipline over excitement. The goal is not to call the top. The goal is to participate thoughtfully when trends are strong—and to maintain a plan for when momentum eventually fades.
Yukon Cornelius had one thing on his mind, as Burl Ives famously sang:
“Silver and gold, Silver and gold, Everyone wishes for silver and gold …”
As investors, we might all do well to keep our eyes clear and avoid letting the prospect of never-ending riches replace the steady work of risk management and sound decision-making.