What's Up with Precious Metals?

By: Kirk McCarty

“Commodities are about the most mean-reverting asset there is.”

– Many people who study economics, but I heard it from Brady Raanes

Barely a month into 2026, the commodities market is already rewriting history - gold has shattered seven all-time highs, silver keeps blasting through new ceilings, and copper is riding a supply-driven rocket to record prices. Each of these metals has unique characteristics that drive their values to new highs and lows. There is often some correlation between the three, but 2011 marks the only other time in history that the three have reached new highs simultaneously.

Let’s look back at history to try and determine how we got here, and more importantly, what might happen next.

GOLD

FAST FACT: The World Gold Council estimates that we have mined roughly 220,000 metric tons of gold and still have roughly 64,000 tons in the ground, meaning we have already mined about 77% of the gold that exists in the world. If we continue to mine at a rate somewhere in the ballpark of 3,600 metric tons per year and estimated supply numbers are accurate all the gold in the world will be mined by the year 2044.

When trying to determine the value of certain assets or companies, we often use the phrase “market cap” to determine this number. In the case of publicly traded companies, this calculation is simply current share price multiplied by shares outstanding. For gold the calculation is no different. To determine the market cap of gold, we simply multiply the current price by the volume of “above ground gold” (meaning gold that has already been mined). Gold’s market cap today is somewhere in the ballpark of $38 trillion dollars. To give you an idea, if you owned every single US dollar in supply today, you could spend every single penny buying gold and you would only be able to buy about 60% of all the gold in the world.

Over the last 12 months, the price of gold has nearly doubled from $2,800 in February of 2025 to almost $5600 in late January. To find some context on how to view moves like this, we can go back to the early 1930s. In 1933, which was the technical ending depression for many countries, President Roosevelt issued an order to increase the fixed price of gold from $20.67 an ounce to $35 dollars an ounce. This represented nearly a 70% increase in the price of gold overnight. The government did this to help combat deflation (or cause inflation, however you want to view it). This move encouraged hoarders of gold to open their markets and allow dollars to flow throughout an economy that was reeling from the effects of The Great Depression. Considering the price was fixed by the government at the time and gold wasn’t freely traded, this isn’t necessarily all that relatable to today’s price action in gold. It does, however, give us some context on how gold has played a massive role in defining the value of money.

The $35 fixed price of gold hung around until the 1970s when the US broke the Bretton Woods agreement and ended the convertibility feature of US dollars into physical gold. This marked the beginning of the price of gold floating freely and truly being determined by supply and demand. Believe it or not, in the first-year gold only saw an increase in price of about 15%. By the end of 1972, however, the spot price of gold was up about 82% from the $35 price was pegged to. The run was far from over. The price of gold continued to climb at a rapid rate. In 1973, it closed at $106 marking an increase of 200% over 3 years. By 1980, gold prices soared to $850 dollars an ounce. Again, not a great comparison to today’s environment, because the price of gold had been suppressed for nearly 40 years prior to the move. Gold experienced fundamental change where for the first time it was allowed to reprice itself daily in a world with was experimenting with an entirely new monetary system. Even if the mechanics differ, the price of action of gold in the 1970s shows us what gold does when the rules of money change.

The most recent time frame of massive gold volatility might also share the most structural similarities to today. From 2001 to 2011, gold rose from $250/oz to $1,900/oz in 2011. The run was fueled by rising debt levels in the US economy, a decrease in real interest rates, and a growing distrust in central banks. This period also marked one of the largest sustained declines of the U.S. Dollar in modern history. The weakness in the dollar was a core driver of the gold market bull run during this time frame.

SILVER

FAST FACT: Data from The U.S. Geological Survey suggests that we have mined roughly 1.7 million metric tons of silver, but unlike gold, more than half of that has been consumed or dispersed through industrial use in electronics, solar panels, medical equipment, and chemical applications.

Silver’s price history is defined by long periods of stagnation punctuated by short, violent spikes driven by leverage, speculation, and macroeconomic changes. Unlike gold, which is viewed mostly as a store of value and monetary hedge, silver sits at the intersection of monetary demand and industrial consumption. This duality can increase volatility during periods of economic uncertainty, as investment demand can surge rapidly while physical supply remains relatively inelastic. When capital floods into the market, silver has historically moved faster, and more violently than gold. Silver also holds a unique difference from gold because it is consumable in nature. Silver is used in many daily electronics, and it is often not economical to recover so there are scenarios that the supply of above ground silver can go down. Solar panels, EVs and their charging infrastructure, and the development of AI have all led to a strain on the silver supply in recent months, which is what fueled the most recent rally.

The most famous example of silver volatility is the late‑1970s silver mania, when inflation, geopolitical tension, and collapsing confidence in fiat currencies drove investors toward hard assets. The move was dramatically intensified by the Hunt brothers’ attempt to corner the silver market using leverage in both futures and physical supply. Silver prices exploded from under $10 per ounce to nearly $50 by early 1980. The peak, however, was brief. Once exchanges raised margin requirements (which also happened multiple times in January) and liquidity tightened, forced selling cascaded through the market. Prices collapsed by more than 50% in a matter of weeks, marking the end of the run and beginning a multi‑decade period of underperformance and range‑bound trading.

A similar, though less extreme, pattern played out during the 2009–2011 precious metals bull market. In the aftermath of the Global Financial Crisis, unprecedented monetary stimulus, negative real interest rates, and rising distrust in central banks reignited investment demand for silver. The metal surged from under $9 in 2008 to nearly $50 again in 2011. As with prior peaks, this peak coincided with heavy speculative positioning and aggressive use of leverage. When inflation expectations moderated, the U.S. dollar stabilized, and policy fears receded, silver prices unraveled quickly.

Throughout history, the patten is nearly identical: parabolic ascent that leads to a violent reversal. This phenomenon happens in many asset classes, but what is a bit specific about these metals is that they almost always experience an extended period of stagnation after the speculation ends and the economy continues as it tends to do. After major peaks, silver rarely collapses straight back to its long‑term mean. Instead, it tends to enter extended periods of flat or choppy trading as speculative excess is worked out and physical supply and demand slowly rebalance. These post‑peak plateaus can last years so trying to understand this rhythm is critical.

COPPER

FAST FACT: Copper is one of the most intensively mined metals in human history, with an estimated 700+ million metric tons already extracted, according to the USGS. However, global electrification trends are rapidly compressing future supply: electric vehicles, renewable energy systems, power grids, and data centers require two to four times more copper than traditional infrastructure. At current consumption rates, known economically recoverable copper reserves imply several decades of supply, but years of underinvestment and declining ore grades mean new production is becoming progressively harder, slower, and more expensive to bring online.

Copper’s price history is less speculative and more economically revealing than that of precious metals. Copper prices tend to rise when growth accelerates and decline when economic momentum fades. Unlike gold and silver, copper is driven almost entirely by physical demand. It is tied closely to construction, manufacturing, infrastructure, and electrification. As a result, copper bull markets typically unfold more slowly and last longer, but they are still vulnerable to sharp reversals when supply finally responds or demand expectations weaken.

Historically, major copper rallies have been fueled by periods of synchronized global expansion combined with constrained supply. The most prominent example was the 2003–2008 commodity super cycle, driven primarily by China’s rapid industrialization and infrastructure build‑out. Copper prices rose from under $1.00 per pound in the early 2000s to over $4.00 by 2006. Although the Global Financial Crisis temporarily crushed demand and sent prices sharply lower, copper recovered quickly as stimulus spending reignited construction and manufacturing. This pattern repeated in the post‑COVID era, when disrupted supply chains, years of mining underinvestment, and aggressive fiscal stimulus pushed copper back to (and beyond) prior highs.

Unlike silver, copper peaks are rarely defined by speculative mania alone. Instead, they often form when capital expenditure finally catches up to demand or when economic expectations roll over. Copper mining projects are capital‑intensive and slow to develop, but high prices eventually incentivize new production, expansions, and technological improvements. As supply loosens and global growth normalizes, copper prices tend to retreat. This makes copper tops less dramatic than those of precious metals, but no less significant.

While copper’s downtrends are typically not as drastic as what we see from gold and silver, they share a big similarity in what happens after major peaks. Copper does not typically collapse and immediately rebound; instead, it enters extended periods of consolidation or sideways trading. Following its 2011 peak near $4.50 per pound, copper spent nearly a decade oscillating within a broad range as supply, demand, and inventory levels gradually rebalanced. This choppy price action reflects copper’s role as a true industrial commodity that is controlled by simple supply and demand.

In today’s environment, copper may be approaching a similar inflection point. Structural demand from electrification, renewable energy, electric vehicles, and data centers has tightened supply, all while other factors have limited production growth. While these forces have driven copper prices higher, history suggests that even structurally sound bull markets eventually give way to mean reversion and consolidation. Copper tends to reward patience rather than momentum chasing, with its greatest gains usually realized before the supply response is fully recognized.

WHAT SHOULD WE LEARN FROM ALL OF THIS?

As you can see, volatility in the commodities market is not all that uncommon. Investing in these areas often involves years of flat prices followed by rapid prices spikes caused by a multitude of factors ranging from uncertainty in the future to simple supply and demand imbalances caused by changes in the use case of that specific good. In most cases we find it to be important to hold at least some level of static allocation to precious metals like these but find it equally important to monitor price action of these with the understanding that history doesn’t always repeat itself, but it often rhymes.

What is rare, however, is that all three metals spike simultaneously. Only one other time in history were all three of these assets spiking to new highs at the same time, which was 2011. What was the 10-year return of these metals if you bought when they peaked together in 2011? Gold ≈ -4%, silver ≈-48%, and copper ≈ -6%.

While we are encouraged by the run up in value, we remain diligent in monitoring the duration and sustainability of such rapid price increases, most notably in silver. We feel a consistent weighting to metals is attractive; however, investors should be aware of concentration risk and the violent swings that often accompany price spikes like what we’ve seen over the last year (more specifically the last few months).

Disclaimer: I began writing this on 1/28/26, two days before the historic melt down in Silver that resulted in a 30% decrease from the 1/29/26 closing price. According to UBS, silver’s decrease that featured nearly 38% intraday movement marks one of the most extreme moves in decades, with volatility approaching levels not seen in almost 50 years.

Any opinions are those of the author and not necessarily those of Raymond James. Expressions of opinion are as of this date and are subject to change without notice. There is no guarantee that these statements, opinions or forecasts provided herein will prove to be correct. The information contained in this report does not purport to be a complete description of the securities, markets, or developments referred to in this material. The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee that it is accurate or complete, it is not a statement of all available data necessary for making an investment decision, and it does not constitute a recommendation. Past performance is not a guarantee of future results. Investing involves risk and you may incur a profit or loss regardless of strategy selected.

Investing in commodities is speculative due to the high potential for loss. Markets are volatile, with sharp price fluctuations even during overall price increases. Investing in gold carries special risks, including wide price fluctuations, a limited market, concentrated sources in potentially unstable countries, and an unregulated market.