The 2025 Precious Metals Super-Cycle: Why Gold and Silver Are Now Core Holdings for Institutional and Retail Portfolios

The global financial landscape in 2025 is marked by a profound shift in asset allocation strategies, driven by the accelerating trend of de-dollarization and the re-emergence of precious metals as central pillars of portfolio resilience. As the U.S. dollar's dominance in global reserves wanes and geopolitical uncertainties intensify, both institutional and retail investors are recalibrating their holdings to prioritize gold and silver. This reallocation reflects a strategic response to a world where traditional safe-haven assets are losing their luster, and tangible, non-correlated assets are gaining unprecedented appeal.

The De-Dollarization Imperative

The U.S. dollar's share of global foreign exchange reserves has declined to 56.92% in Q3 2025, according to the IMF's COFER survey. This erosion of dominance is not merely a statistical shift but a structural realignment. Central banks, particularly in emerging markets, are actively diversifying their reserves to mitigate risks tied to dollar-centric policies and geopolitical tensions. For instance, China's 13-month gold-buying spree added 74.12 million fine troy ounces by November 2025, while Poland's National Bank alone acquired 16 tonnes in October 2025, bringing its total reserves to 531 tonnes. These actions underscore a broader effort to reduce exposure to a currency whose credibility is increasingly questioned in a multipolar world.

The dollar's weakening position has also made gold more accessible to international buyers. As the dollar depreciates, gold's price in other currencies rises, amplifying demand. By April 2025, gold prices surged to $3,500 per ounce, a record high, while silver hit $54.48 in October 2025, driven by a confluence of industrial demand and monetary reallocation. This dual dynamic-geopolitical hedging and currency depreciation-has cemented precious metals as critical components of global reserve portfolios.

Institutional Reallocation: A 60/20/20 Framework

Institutional investors have responded to these shifts by redefining their asset allocation models. The traditional 60/40 portfolio, long favored for its balance of stocks and bonds, has been supplanted by a 60/20/20 framework, where 20% of allocations are now directed toward gold. This strategy, endorsed by Morgan Stanley and other major financial firms, reflects a recognition of gold's role as a hedge against inflation, currency debasement, and systemic risk.

Gold's structural bull cycle is further reinforced by central bank demand. In Q4 2025, central banks purchased 53 tonnes of gold in October alone-a 36% increase from the previous month-marking the largest monthly net demand year-to-date according to data from the gold industry. Analysts at Goldman Sachs estimate that emerging economies could require an additional 2,000–3,000 tonnes of gold to increase their allocations from 6–7% to 12–15%, a trajectory that supports elevated demand through 2026–2027.

Silver, meanwhile, has emerged as a complementary asset. Its dual role as an industrial commodity and a monetary metal has made it a strategic holding for institutions seeking diversification. The gold:silver ratio, a key indicator of relative demand, reached its lowest level since July 2024 in 2025, signaling growing institutional confidence in silver. With industrial demand from sectors like solar energy and AI infrastructure surging, silver's price is projected to remain volatile but robust in 2026 according to market analysis.

Retail Reallocation: A Hedge Against Uncertainty

Retail investors have mirrored institutional trends, with physical gold ETFs attracting $38 billion in inflows during the first half of 2025-the largest semi-annual increase since early 2020. Conservative allocation models now recommend 5–10% exposure to precious metals as a buffer against currency devaluation and geopolitical shocks. This shift is particularly pronounced in markets where the dollar's weakening is most acutely felt, such as China and India, where retail demand for gold and silver has surged.

Silver's retail appeal has been amplified by its record-breaking performance. By October 2025, silver prices surpassed $75 per ounce, delivering a year-to-date gain of 158% and a market capitalization exceeding $4 trillion. This rally has been fueled by a combination of industrial demand, Fed rate cuts, and a structural supply deficit, making silver an attractive alternative to traditional assets.

The Path Forward: A Super-Cycle in Precious Metals

The convergence of de-dollarization, geopolitical instability, and structural supply constraints positions gold and silver for sustained outperformance. For institutions, the 60/20/20 model offers a blueprint for navigating a world where traditional correlations break down. For retail investors, the case for precious metals is equally compelling: tangible assets that preserve value in times of uncertainty.

Looking ahead, the BRICS gold-backed currency initiative and the continued depletion of above-ground silver inventories suggest that the super-cycle for precious metals is far from over. As central banks and investors alike pivot away from dollar-centric paradigms, gold and silver will remain indispensable tools for portfolio resilience.