The Relative Value Prospects of Precious Metals in 2026

In terms of price returns, metals have far outshined any other asset class since the end of 2024 with gains of 65% for gold, 95% for palladium, 150% for platinum and 170% for silver as of January 6. Gold's relative underperformance probably has a lot to do with the yellow metal's gains outpacing those of the other metals to such a great extent between 2000 and the end of 2024. During those first five years of the 2020s, gold gained 73%, silver rose by 63% while platinum and palladium prices fell by 8% and 52%, respectively. To some extent, the recent outperformance of silver, platinum and palladium may reflect their playing catch up after a long period of relative underperformance.

So how might investors see the relative value story among these precious metals? And what are their prospects more broadly?

The Relative Value Story Among Precious Metals: Silver versus Gold

It's getting harder to argue that silver is still cheap relative to gold. The gold-silver price ratio (the number of ounces of silver one could buy for one ounce of gold), has fallen to its lowest level since 2013 (Figure 2).

Figure 2: The gold-silver ratio has moved strongly towards silver in recent months

Some of silver's gains may reflect its "high beta" nature versus gold. Silver and gold are deeply connected via the jewelry and investment markets and silver's high beta results from it being a much smaller market which often amplifies its moves. Silver is both highly correlated with gold and typically more volatile (Figures 3 and 4). As such, up and down moves in gold tend to be reflected in silver to an even greater extent.

Figure 3: Silver usually has a strong positive correlation to gold

Figure 4: Silver usually displays higher volatility than gold

There is, however, more to the story than correlation and relative volatility. Silver underperformed for much of the century because of the shift to digital photography which largely eliminated the need to develop photographs on silver plates, an activity that consumed one quarter of the world's silver output in 2000. In recent years, however, silver has found new sources of demand, including in batteries and solar panels, which appear to be driving the gold-silver ratio back in silver's favor (Figure 5).

Figure 5: Silver lost its use in photography but is gaining in solar panels & batteries

Platinum and Palladium Versus Gold and Silver

Meanwhile, despite its recent rally, platinum remains historically inexpensive relative to gold and silver. Back in 2007, when platinum hit a record high, it was nearly 2.5x as expensive as gold. That has changed. As of early January, gold is close to 2x as expensive as platinum (Figure 6). Much of platinum's underperformance can be attributed to waning demand for diesel cars and, by extension, less need for platinum catalytic converters.

Figure 6: Platinum is still historically cheap compared to gold and silve

Palladium's two historic price spikes relative to the other metals came after periods of supply constraints, but prices have returned close to historic lows versus gold and silver (Figure 7). Palladium demand, too, has begun to erode as EVs have gained market share across the world in recent years. That said, EV sales could slide in 2026 as many countries, including China and the U.S., have curtailed subsidies.

Figure 7: Palladium is also historically cheap compared to gold and silver

As such, it's easy to see how investors, looking for diversification beyond gold, could be attracted to silver, platinum and palladium. However, there is one last point to consider, which is the relative size of the markets.

The relative size of the various metals markets

In 2025, the world's miners extracted 818 million troy ounces of silver, 95 million of gold, 6.4 million of palladium and 5.5 million of platinum (Figure 8). But mining supply doesn't by itself tell us about the relative size of the markets.

Figure 8: Silver and gold mining output dwarf those of palladium and platinum

Valuing the metals at early January 2026 prices, the value of gold mining output exceeds that of silver by roughly 6.5x and that of platinum and palladium by around 35x (Figure 9). As such, even if a small portion of gold investors choose to diversify into silver, platinum and palladium, their investment decisions could drive their prices in U.S. dollars (USD), and their price ratios relative to gold higher. This makes the macro picture driving the precious metals rally especially important even for relative value investors.

Figure 9: The economic value of gold output is 6.5x that of silver and 35x of the PGMs

How the Macro Picture Might Evolve in 2026

There appear to have been several macro factors driving gold prices higher in recent years, which subsequently spilled over into other precious metals markets. Among them are:

1. Core inflation remains above central bank targets nearly everywhere.
2. Despite above-target core inflation, most central banks outside of Brazil and Japan are cutting rates anyway.
3. Large budget deficits in major economies.
4. Changing geopolitics.

As such, investors should watch core inflation rates closely. If they remain above target or rise further and central banks don't respond with policy tightening, investors could construe this as an argument to continue increasing their portfolio allocations to these metals. By contrast, if core inflation eases, investor concern about inflation could abate, weakening demand for precious metals. The same could be true if central banks reverse course and raise rates. No central bank is of greater importance than the U.S. Federal Reserve (Fed), and with the Fed undergoing a leadership change in May 2026, investors will likely scrutinize its actions closely.

While the direction of monetary policy and core inflation is the subject of great uncertainty, there is less uncertainty about the direction of global fiscal policy. Brazil, China, France, Russia, Saudi Arabia, the U.K. and U.S. are running large budget deficits, and none of them are taking meaningful actions to rein in the size of their deficits. Moreover, other countries including Germany and Japan are loosening their fiscal stance to boost military spending, and in Germany's case, investment in public infrastructure. As such, it seems that fiscal postures will likely remain supportive for precious metals in 2026.

Finally, there is the issue of geopolitics. If geopolitical concerns intensify, they could further boost gold prices, and by extension the prices of other metals. By contrast, if investors see the geopolitical situation as stabilizing, this could lead to some money flowing out of precious metals and into fiat currencies.

All examples in this report are hypothetical interpretations of situations and are used for explanation purposes only. The views in this report reflect solely those of the author and not necessarily those of CME Group or its affiliated institutions. This report and the information herein should not be considered investment advice or the results of actual market experience.