Investing
The precious metals have been on a shining run so far this year amid rising trade uncertainties and the potentially heavy blow on corporate earnings that tariffs will deal. Undoubtedly, tariffs can be quite the costly disruptor for firms, especially those that need to pivot their supply chains unexpectedly.
For instance, it’s going to cost Apple (NASDAQ:AAPL) a great deal to move part of its manufacturing from China to India, and even more if President Trump has his way and iPhones actually do get produced in America.
Undoubtedly, even if Apple were to move some production to the U.S., I’m not so sure how many Americans would be able to pay more than $3,000 for their next iPhone, especially in today’s tough consumer environment. With inflation and the threat of AI automation, it’s not an easy time to be a consumer. And such jarring tariff-induced price hikes may be enough to convince most Americans to put their wallets away for good.
In any case, it’s tough to predict what recent talks between the U.S. and China will amount to in the second half of the year. Although things have de-escalated since Spring, there’s still a lot of tension and several matters that have yet to be addressed.
It’s fine to be hopeful over the latest agreement between the two nations, but trade talks still seem to be in the early innings of a game that may very well go into overtime. Either way, the precious metals have been thriving in this kind of environment, where the future of trade between the U.S. and most of the world is pretty much a big question mark.
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Gold and silver are on an incredible run amid rising trade and macro unknowns.
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A number of big banks see higher highs for both precious metals in the second half of 2025.
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Gold’s stunning rally could get another leg higher in the second half
Indeed, gold’s impressive bull run has gone on for around two and a half years now, with prices having more than doubled since the depths of October 2023. And while prices have flatlined since April, there is reason to stay upbeat on the price of gold, especially amid trade uncertainty, the conflict in Eastern Europe, and the Middle East, as well as recent sluggishness in the greenback. With big nations, including China, adding to their reserves, there seem to be enough drivers to pave the way for even higher gold prices.
Several big banks, including JPMorgan (NYSE:JPM), which thinks gold will average $3,675 per ounce in the fourth quarter of 2025, expect to see higher gold by year’s end. That represents a robust 10% gain within the next six months. Time will tell if higher highs are in the cards for the shining yellow metal. Either way, the metal seems to have no shortage of tailwinds, making it a vital hedge at a time of great uncertainty and unease.
My preferred way to play gold prices is the SPDR Gold Shares (NYSEARCA:GLD). Though investors seeking deeper value may find more opportunity and potential upside in the miners.
The silver surge came at an unexpected time. And there’s still room to run.
Silver isn’t quite the same portfolio hedge as gold, but if you’re a fan of the gold-to-silver ratio as a way to gauge the relative value of silver, there’s no denying that the precious, industrial metal is looking quite cheap these days, even after its impressive year-to-date run. With silver prices gaining close to 22% for 2025 thus far, I think investors would be wise to also consider stashing some silver bars away.
Undoubtedly, some different forces are pushing silver higher. Most notably, demand for solar panels, EVs, and other electronics all have an uplifting effect on the price of silver. Amid newfound strength, many big banks, JPMorgan included, see higher highs for silver in the second half. While silver has a higher correlation to the broad stock market (around 0.8) compared to gold (around 0.3), investors shouldn’t expect as much dampened downside should another market-wide correction be on the way. Either way, I view silver as a fine complement to gold, given silver’s less-heated run in recent years and higher perceived value.
For those looking to bet on silver bullion, the iShares Silver Trust (NYSEARCA:SLV) seems like a great way to go.
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