What Percent of Your Investments Should Be Precious Metals?

Deciding how to split up an investment portfolio is genuinely difficult. Between IRAs, 401(k) accounts, real estate, and the broad universe of other opportunities, every allocation choice carries real trade-offs. One question that keeps surfacing, especially after the extraordinary run precious metals posted in 2025, is how much of a portfolio should actually sit in gold, silver, and their peers.

A Redditor posting in r/Gold raised exactly that question, linking to a YouTube video that discusses gold accounting for roughly 40% of German investment allocations. That figure stands out for a reason: Germany’s collective memory of hyperinflation nearly a century ago shapes its relationship with hard assets in ways that may not translate directly to other countries or individual investors.

Investing in Precious Metals

The case for holding some precious metals in a portfolio comes down to diversification. Gold and silver tend to move independently of stocks and bonds, which gives them genuine value as portfolio ballast during periods of market stress. That characteristic was on vivid display in 2025, when gold set 53 new all-time highs over the course of the year, with the average annual price reaching $3,431 per ounce, up 44% from 2024. By late December 2025, gold was trading above $4,500 per ounce, and the metal hit an all-time record of $5,589 per ounce in January 2026. Silver posted its own historic performance, gaining more than 130% from the start of 2025 through late December.

Those moves were driven by a confluence of factors: geopolitical uncertainty, persistent inflation concerns, U.S. dollar weakness, and steady central bank buying. The World Gold Council reported that three consecutive years of more than 1,000 tonnes of central bank gold purchases helped underpin the structural demand behind the rally. For investors watching from the sidelines, the performance raised a familiar question about allocation.

How Much To Own

Expert opinion on the right allocation spans a fairly wide range, but a clear mainstream consensus has emerged. Many financial advisors recommend dedicating somewhere between 5% and 15% of a total portfolio to precious metals, with major institutions on the more conservative end of that band. In an October 2024 report, Russ Koesterich of BlackRock’s global allocation team advocated for a “modest allocation to gold (think 2%-5%),” and UBS Wealth Management similarly suggests maintaining around 5% in gold as a hedge against risk. Rob Duncan of Global Impact Wealth Management takes a middle view, recommending a 3% to 5% allocation to gold, metals, or a diversified commodities position.

Some advisors are willing to go higher. Nate Byers, lead advisor and founder at Calculated Wealth, has argued that financial history supports a roughly 20% allocation to gold, though he cautions that gold can endure long stretches of flat or negative performance, making timing and patience essential. On the aggressive end, some strategies for younger investors with high risk tolerance support allocations of 15% to 20%, blending gold, silver, and potentially platinum or palladium.

For most people, the video referenced in the original r/Gold post points toward a 5% to 20% window as a practical range. Translating that to real dollars: on a $100,000 portfolio, that represents between $5,000 and $20,000 committed to precious metals.

The choice of which metal matters too. Gold gets the most attention, but silver carries its own appeal. Silver’s lower price per ounce lowers the barrier to entry for investors who want physical exposure without a large upfront commitment. Silver also has significant industrial demand, particularly in electronics and renewable energy, which gives it a growth dimension that pure monetary metals lack. That said, silver is also more volatile than gold, so its higher potential return comes with more price swings along the way.

Set the Right Expectations

Precious metals are a long-term hold, full stop. Anyone approaching gold or silver as a short-term trade is misusing the asset class. Prices move in both directions, sometimes sharply, and the 2025 surge is an exception rather than the norm. Over many years, gold has historically lagged equity returns in nominal terms, even as it has provided insurance value during crises and inflationary cycles.

There are also structural questions worth discussing with a qualified fiduciary financial advisor: whether precious metals should substitute for a bond allocation, how to hold them (physical bullion, ETFs, or mining stocks each carry different trade-offs), and how the IRS treats physical metals held in a self-directed IRA. A fiduciary can help map those decisions to a specific financial situation.

The ceiling that experts cite, around 20%, is not a target. A more modest allocation in the 5% to 10% range preserves capital for assets that generate income, whether dividend-paying stocks, real estate investment trusts, or other cash-flowing holdings. The right number is personal and depends on age, risk tolerance, time horizon, and how the rest of the portfolio is constructed.

Editor’s note: This article was updated to include gold and silver’s historic 2025 price performance, including gold’s 44% annual average price gain and its all-time record above $5,500 per ounce reached in January 2026, as well as current expert allocation guidance from BlackRock, UBS, and other institutional sources, which place the mainstream consensus in the 5% to 15% range rather than the broader 5% to 20% window cited previously.