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Gold and Silver: Overbought or Still Undervalued? The 2025 Precious Metals Playbook
It’s no secret that gold and silver have been on fire this year. Prices have surged, headlines are buzzing, and investors everywhere are wondering: Is it too late to get in?
If you’ve been watching the charts or listening to the mainstream media, it might feel like you missed the boat. But according to my guest, David McAlvany, that couldn’t be further from the truth. David and his family have been deep in the precious metals world since the 1970s right after Nixon took us off the gold standard. They’ve traded billions in metals, helped legalize private gold ownership in the U.S., and built an investment firm that specializes in hard assets and wealth preservation.
I brought David back on the show to answer one simple question: Is gold and silver overbought, or are they still the most underowned assets in the world?
Physical Metals vs. Mining Stocks: Knowing Your Mandate
A lot of investors confuse the roles of gold miners and physical metal. As David put it, “They’re completely different mandates.”
Mining stocks are a growth play you’re investing in the operations and leverage of a company. When things go right, they can outperform gold and silver dramatically. But when they go wrong, it’s ugly. You’re dealing with management risk, balance sheet risk, and even geopolitical risk.
Physical gold and silver, on the other hand, are your wealth insurance. They’re the assets you hold not because you want fast growth, but because you want stability when everything else gets shaky. And with the global financial and political landscape looking the way it does, having that insurance matters more than ever.
The “Overbought but Underowned” Paradox
Yes, gold and silver charts are showing overbought signals but David points out that ownership levels are shockingly low.
Bank of America recently found that professional money managers hold just 2.4% of their portfolios in gold, while private investors hold less than 0.4%. Even major ETFs like GLD and SLV have seen outflows, not inflows.
Meanwhile, central banks are buying at record levels, setting the tone for what could be a massive repricing ahead.
We’re starting to see mainstream Wall Street voices shift, too. Analysts like Michael Hartnett (BofA) and Mike Wilson (Morgan Stanley) are recommending portfolio allocations with 15–20% gold exposure levels unheard of just a few years ago. That’s not a fad. That’s a regime change in how serious investors are viewing risk.
Silver’s Catch-Up Moment
If gold’s the steady hand, silver is the rocket fuel.
Historically, the gold-to-silver ratio averages around 65:1 but recently, it’s been hovering near 80:1. That means silver is deeply undervalued compared to gold. When that ratio starts tightening say, back to 60:1 or even 40:1 it signals silver’s time to shine.
In 2011, that ratio hit 31:1, and silver exploded to nearly $50 an ounce. If you’re wondering when to get exposure, this might just be the window before the next breakout.
How to “Cash Flow” Metals (Yes, It’s Possible)
Metals don’t pay dividends or rent but that doesn’t mean they can’t generate returns.
David explained a simple but powerful concept: compounding your ounces. By trading between gold and silver when ratios and premiums shift, you can grow your holdings without adding new money. It’s like “synthetic cash flow” you’re letting the market cycles work for you instead of against you.
Over time, that compounding can significantly increase your ounces, even if prices move sideways.
Don’t Ignore Platinum and Palladium
While gold and silver get all the attention, platinum and palladium are quietly having their own moment. Platinum is up over 80% year-to-date, driven by supply deficits and a rebound in internal combustion engine demand.
These white metals carry industrial exposure, which means they can be volatile but in the right cycle, they can also deliver massive upside. They’re another layer of diversification for investors who already have a solid base in gold and silver.
Crypto vs. Gold: Is Digital Gold the Real Thing?
One of my favorite parts of our conversation was when I asked David whether crypto is the new gold. His answer was clear: “Not yet.”
While Bitcoin and Ethereum have their place, their track record in market downturns tells the story. During equity selloffs, crypto has fallen alongside stocks, while gold held steady or even rose. That’s not wealth insurance that’s speculation.
Until crypto proves it can hold up when everything else breaks, gold remains the true hedge.
The Ripple Effect: Building More Than Wealth
At Money Ripples, I always say it’s not just about getting rich it’s about creating a ripple effect that blesses your life and the lives of others. David echoed that beautifully, reminding us that real wealth isn’t just ounces or dollars it’s the values, wisdom, and relationships we pass down.
“We may be in the tangible business,” he said, “but we care about the hearts and minds of the families we work with.”
That’s a ripple I can stand behind.
Final Thoughts
Gold and silver may be “overbought,” but they’re far from overowned. If anything, this might be the early stages of a new era in hard-asset investing one where precious metals take their rightful place alongside stocks, real estate, and business ownership.
If you’re building passive income and working toward financial freedom, make sure your strategy includes real assets that can outlast inflation, volatility, and uncertainty.
To connect with David’s team, check out mcalvany.com and their educational resources, including the Golden Rule Radio and McAlvany Weekly Commentary podcasts.