According to data from MarketWatch, the price of gold has surged by 27% over the past three months. Credit: iStock
Investors have flocked to precious metals in droves over recent weeks, causing significant price fluctuation and leading managers to look for various ways to maximise returns from the widespread hype.
Data from interactive investor revealed precious metals were at the forefront of investors' minds in January 2026.
The iShares Physical Silver ETC and iShares Physical Gold ETC came in top of the most-bought passive funds pile, while Jupiter's Gold and Silver fund and Ninety One Global Gold both featured high in the active funds list.
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Ian Aylward, head of investment partnerships at AJ Bell, explained that, traditionally, gold has been viewed by investors as an "attractive hedge" thanks to its low correlations with equities and bonds.
Over recent months, its appeal as a ‘safe haven' asset has grown even stronger amid increasing US dollar weakness, geopolitical uncertainty around the strength of the relationship between Europe and the US, and questions of central bank independence.
The price of gold has surged by 27% over the past three months, according to data from MarketWatch. At the time of reporting, the precious metal was trading at around $5,060 per troy ounce, a fall from its heights of more than $5,600 just last week (29 January).
Silver has enjoyed an even more tectonic rise, climbing 88.1% over the past three months to around $90.
However, in spite of evident interest from retail investors set on maximising returns, some fund managers have struggled to navigate the unpredictability of the yellow metal.
Gold has an annualised volatility of 17%, significantly more than the volatility of US Treasuries, which comes in at close to 8%, according to AJ Bell.
"This does not tick the boxes of a typical ‘safe haven' asset from our perspective and limits its reliability for drawdown protection in diversified portfolios," Aylward argued.
As a result, he noted it has been "hard to find a place for gold within our portfolios, especially at the current price level".
Dan Higgins, CEO at Marylebone Partners, which oversees the £165m investment trust Majedie Investments, admitted it was "hard to know what price to pay for gold because it does not have a cash flow".
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Majedie has instead invested in a copper-focused ETF to avoid the risk of funnelling capital into a single mine or mining company. Due to copper's 21% rise over the past three months, the position has borne fruit.
The trust has also capitalised on the precious metals trend with exposure to uranium, which it sees as crucial to the world's long-term energy transition. The uranium price broke through $100 per pound at the end of January, a level not seen since February 2024, according to Trading Economics.
Mark Ellis, CEO and CIO of Nutshell Asset Management, has even taken positions as active shorts against "the obvious bubble in commodities".
The firm has recently deployed new capital into Danish jewellery manufacturer Pandora in a deliberate short against the rising price of silver. "It is a more discretionary stock for us to try to fade this silver move," Ellis explained.
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As investors have attempted to grabble with the precious metal rally, some managers have even warned this price boom could be different to what has occurred before.
George Chevely, natural resources portfolio manager at Ninety One, said that historically the strength of gold coincides with "constrained real yields, elevated macro uncertainty and demand for diversification rather than outright risk taking".
However, with this cycle there is a "notable difference", he highlighted. The portfolio manager argued that "the scale and persistence of central-bank demand, which has become a more important driver of the market than in previous episodes, and provides a degree of structural support", marks a different environment for gold to rally.
Despite this, easing geopolitical tensions over Greenland and US President Donald Trump's decision to pick Kevin Warsh as the next chair of the Federal Reserve, a figure well-regarded by markets, has shifted the long-term prospect of safe haven assets.
Russ Mold, investment director at AJ Bell, noted that these events could "give support to the dollar and if that haven asset is strong, then demand for other havens such as gold could go down".
