Hedging Risk With Precious Metals: The Role Of Gold And Silver In Modern Portfolios

Abstract

This study investigates the roles of gold and silver as safe-haven assets and their contribution to portfolio diversification during periods of market uncertainty. Using survey data from 100 investors, the study analysed the relationship between precious metal preferences and diversification strategies. The findings demonstrate that gold maintains a stronger association with portfolio stability and risk mitigation compared to silver, which plays a more complementary role influenced by industrial demand factors. While both metals offer diversification benefits, gold emerges as the more reliable safe-haven asset, particularly during economic turbulence. These insights provide valuable guidance for investors seeking to optimize their precious metal allocations in diversified portfolios.