Gold and silver have enjoyed spectacular runs over the past couple of years. In 2025, gold returned 64%, while silver surged 142%. Both continued climbing into January of this year, reaching new all-time highs. Gold peaked at $5,318 per ounce, and silver hit $115 per ounce.
But then the rally unraveled.
Since their peaks, gold has fallen nearly 24%, while silver has dropped 49%.
That’s a remarkable amount of volatility for assets that are often viewed as defensive investments. Gold, in particular, has long been considered a safe harbor during periods of economic uncertainty and market stress. While it has occasionally served that role, its track record is far less consistent than many investors assume.
In fact, silver’s recent decline is nearly identical to Bitcoin’s drop from its October 2025 peak. At first glance, that comparison may seem surprising. After all, Bitcoin is often criticized as being speculative and inherently risky, while gold and silver are frequently portrayed as stores of value.
So how can their price movements look so similar?
| Prices and Returns | |||
| Prices | Gold | Silver | BTC |
| 12/31/2024 | $2,641 | $29 | $93,620 |
| 12/31/2025 | $4,341 | $71 | $87,324 |
| High | $5,318 | $115 | $125,550 |
| Now | $4,060 | $59 | $60,050 |
| Returns | |||
| Calendar Year 2025 | 64.4% | 141.6% | -6.7% |
| 12/31/24 to High | 101.4% | 293.3% | 34.1% |
| Peak-to-Now Loss | -23.7% | -49.0% | -52.2% |
| 12/31/24 to Now | 53.7% | 100.6% | -35.9% |
| Date of Peak Price | 1/29/2026 | 1/26/2026 | 10/6/2025 |
Source: CNBC, Armbruster Capital Research
The answer lies in valuation. Or lack thereof.
With stocks, investors can compare a company’s price to what it produces. Metrics such as the price-to-earnings (P/E) ratio help measure how much investors are paying for a stream of earnings. Bonds can be evaluated based on the income they generate, with yields providing a straightforward measure of expected return.
Precious metals are different.
Gold and silver do not generate earnings, pay dividends, or produce cash flow. While analysts have developed various ways to assess supply, demand, and historical price relationships, there is no widely accepted framework for determining their intrinsic value.
Without a clear method of valuation, prices are driven largely by investor sentiment and expectations. In many respects, this resembles the dynamic often associated with Bitcoin: investors buy today hoping someone else will be willing to pay more tomorrow.
Economists often refer to this as the “greater fool theory.” If an asset does not generate any economic output or cash flow, its return depends largely on finding a future buyer willing to pay a higher price.
Proponents of precious metals often point to inflation protection as a justification for ownership. While gold has at times served as an inflation hedge, its record has been mixed and far from reliable. There have been long periods when inflation-adjusted returns were disappointing despite rising consumer prices.
For these reasons, we generally do not include precious metals in client portfolios.
Our investment philosophy is built around owning productive assets—investments that generate earnings, cash flow, interest, dividends, or other tangible economic returns. Those cash flows provide a basis for estimating value and forming reasonable expectations about future returns.
With gold and silver, we see considerable volatility but little basis for estimating long-term expected returns. In our view, that combination makes them difficult to justify as strategic portfolio holdings.
While precious metals may continue to experience powerful rallies from time to time, successful investing is not about chasing what has recently gone up. It is about owning assets with a sound economic foundation and a reasonable expectation of creating wealth over the long run.
Disclaimer: Armbruster Capital Management’s views as portrayed in this post are subject to change based on market conditions and other factors. These views should not be construed as a recommendation for any specific security or sector. Investing involves risks, and the value of your investment will fluctuate over time, and you may gain or lose money. Past performance is no guarantee of future results.