[West Street Observation] Rationally View High-Level Gold and Silver: Don't Deify, Don't Follow Blindly

Back from the Spring Festival, gold and silver prices have risen again.

Although prices have not yet broken through previous highs, among major asset classes, their cumulative gains still stand out, keeping the market heat for gold and silver high.

Since the beginning of the year, gold and silver have been highly volatile at high levels, with constant headlines about price increases on one side and fierce battles between bulls and bears on the other. Market sentiment swings wildly between extreme optimism and panic.

In this round of market, two extreme mentalities are particularly typical.

One is to deify gold and silver, portraying them as “never crashing, absolutely safe, able to withstand all cycles” ultimate assets, as if holding them guarantees profit without loss, ignoring valuation, volatility, and risk.

The other is blind follow-the-leader behavior, ignoring monetary logic and supply-demand patterns, only seeing others profit, short videos promoting gains, and one-sided public opinion. They chase high and go all-in, treating assets meant for hedging as speculative tools for overnight riches.

These two attitudes are different but both are irrational behaviors driven by emotion.

In fact, gold and silver have never been tools for overnight wealth but are stabilizers in asset allocation.

The core value of gold comes from its dual role as a currency and a safe haven. Long-term, it resists currency depreciation and hedges systemic risks, serving as a ballast asset for central banks and mature funds worldwide.

Silver, meanwhile, combines financial and industrial attributes. It is not only a precious metal but also an essential raw material for new energy, photovoltaics, and electronics industries. Its recent surge is the result of dual demand resonance, making silver the “king of elasticity” in this market wave.

But no matter how strong the logic, it cannot change a basic fact: there are no assets that only go up.

Current gold and silver prices have already fully priced in expectations of rate cuts, geopolitical conflicts, industrial demand, and other positive factors. High volatility itself signals risk accumulation.

Leverage trading may seem to amplify gains, but once the trend reverses, it can quickly wipe out the principal. Chasing high and holding large positions may seem to seize opportunities, but in reality, it hands market volatility the reins.

Blind faith may seem firm, but it is actually ignoring risks. Even with bright industrial demand for silver, there are long-term concerns such as technological substitution, cyclical downturns, and changing supply-demand patterns. There are no eternal rigid logic.

For ordinary investors, the clearest realization is: do not deify, do not blindly follow.

Gold and silver can be part of a diversified portfolio to spread risk and preserve wealth, but never enter blindly with a gambler’s mindset. They can be long-term optimistic, but short-term quick profits are unrealistic. Participation should be moderate and based on personal asset conditions, not driven by emotional bets.

Of course, markets always cycle through phases. The value of gold and silver does not need to be deified, nor should it be underestimated. They have irreplaceable allocation significance and follow inevitable volatility patterns.

Beijing Business Daily Commentator Yue Pinyu