Should investors be adding to precious metals?

By Joss Murphy on 18 March 2026 in Specialist investing

Is now the time for gold? Gold prices reached an all-time high at the end of January, before falling back roughly 10% in two days*. However, ongoing geopolitical tensions and concerns about fiscal policy have left prices elevated as investors reach for assets that can hold their nerve. Precious metals have been used for this purpose in the past due to their intrinsic value and independence from companies or governments. But how can you get exposure?

Understanding the backdrop

Global stock markets have remained fairly resilient in the two weeks after the first strikes on Iran by US and Israeli forces in late February. Most indices are only down around 2%**. Upbeat comments from US President Donald Trump suggesting a fairly quick end to the conflict helped calm anxiety about the impact on oil supplies. However, many investors want to increase their precious metals exposure to help safeguard their overall portfolio should the situation escalate.

The role of gold in a portfolio

During periods of heightened volatility and rising energy prices, diversification is key, with more focus on genuinely uncorrelated sources of return. Assets that can remain stable or even appreciate in value when broader stock markets find themselves under pressure become more popular.

According to research from JPMorgan, looking at the past 12 geopolitical risk events that have occurred since the Kuwait invasion and the first Gulf war in 1990,

“gold is the most resilient safe haven, up 4% in the month following the event. US 10-year bonds tend to perform better than gold during equity bear markets, rather than around geopolitical events.”

Additionally, gold tends to retain its purchasing power even when currency values fall, which is why investors increase exposure during periods of high inflation. As we have already pointed out, it’s also a store of value during geopolitical uncertainty, market volatility or global financial problems. However, it’s important to note that gold doesn’t pay interest and it can still experience sharp short-term swings in response to economic factors such as interest rate movements.

But does gold have more room to run?

Total gold demand reached an all-time high last year due to continued geopolitical and economic uncertainty, according to the World Gold Council (WGC)***. It revealed that global investment demand reached a landmark level of 2,175 tonnes and was the main driver of gold’s remarkable, record-breaking year.

This enthusiasm led to surging, widespread global demand for gold, according to Louise Street, the WGC’s senior markets analyst. She said:

“Consumers and investors alike bought and held gold in an environment where economic and geopolitical risks have become the new normal.”

Gold prices have more than doubled since late 2023, repeatedly hitting all-time highs in a sustained rally. The metal’s drivers include the US dollar. Due to being denominated in this currency, the price often demonstrates a negative correlation with the dollar. Therefore, when the currency weakens, gold increases in comparative attractiveness. Conversely, prices tend to weaken when the dollar strengthens.

So, what’s likely to happen to the gold price? Well, JPMorgan remains bullish on the outlook, believing it could reach $6,000 to $6,300 per ounce. “We expect to see sustained support for gold over the longer term, due to concerns regarding fiscal discipline globally,” it added.

Three funds offering varying levels of gold exposure

While investors can get exposure to gold and other precious metals by buying the metals themselves, a more likely alternative is to buy a commodity-focused thematic fund and benefit from a professional manager making the asset allocation calls.

There are three that we believe are worth considering:

WS Amati Strategic Metals

This fund is one of our current favourites in this area and provides investors with a diversified portfolio of metals and mining equities. These include gold and a range of base metals that we believe are essential to both defence supply chains and the energy transition theme.

This is an active, high-conviction portfolio, the investment process of which is driven by a combination of bottom-up analysis and the economic backdrop. Its management team only invests in globally-listed metals and mining companies, revenues which are sourced from the sale of strategic metals.

Currently, gold accounts for almost 40% of the fund’s asset allocation, with 18% in silver and 13% in lithium. Other exposures include nickel and copper****.

BlackRock World Mining Trust

This is a specialist trust offering exposure to global mining and metals companies, as well as physical metals and royalties derived from their production. We like the flexibility it enjoys and the fact that it offers an attractive – and alternative – dividend yield to investors, which is likely to appeal.

It’s also managed by one of the most experienced teams in the space, with co-manager Evy Hambro also serving as BlackRock’s global head of thematic and sector investing. According to a recent fund factsheet, the trust retains a favourable outlook for the mining sector across various metals. “Supply and demand dynamics look favourable for most mined commodities, with particular strength in gold and copper,” they wrote.

Jupiter Gold & Silver

This is a truly unique fund, which invests in both physical gold and silver bullion, as well as mining companies involved in both metals. It’s run by a passionate advocate for the asset class, co-manager Ned Naylor-Leyland, and we like the team’s willingness to adjust positioning in response to market conditions.

The fund is particularly eye-catching, as most portfolios in its peer group can’t hold physical bullion. The fact that it can hold up to 70% in silver also increases the chance of higher returns.

In a recent interview with FundCalibre, Ned insisted that investors would be wise to consider exposure to gold and silver, given how governments view them. “My opinion is it should be part of people’s portfolio at all times,” he said. “In terms of a long-term allocation, gold is the principal reserve asset of the central banks and the state.”

*Source: JPMorgan, 19 February 2026

**Source: Morningstar data, as at 13 March 2026

***Source: World Gold Council, 29 January 2026

****Source: fund factsheet, February 2026