Is All That Glitters Gold? Making Sense of the Recent Rally

If you’ve been watching the financial news lately—or even just glancing at headlines while checking the weather—you’ve probably noticed something shiny catching everyone’s eye.

Gold has been on a tear. As I write this in January 2026, gold has surpassed $4,700 per ounce, and silver is trading above $90. Those are historic numbers. And when we see assets hitting record highs, it triggers a very natural, very human reaction: “Am I missing out? Should I be buying this?”

I’ve had several conversations this week with clients asking exactly that. With all the noise about the Federal Reserve, inflation, and tension in Washington, gold feels like a safe harbor in a storm.

But before we make any big moves in your financial house, let’s take a breath. Let's look at what is actually happening, look at the history, and see if precious metals really belong in your retirement blueprint.

Why Is Gold Glittering Right Now?

First, it’s important to validate why this is happening. You aren't imagining the uncertainty.

• The "Fear" Factor: Gold often rallies when people are nervous. Right now, there is tension regarding the Federal Reserve and monetary policy. When investors get jittery about the dollar or inflation, they look for a "store of value."

• Central Banks are Buying: It’s not just regular folks; central banks around the world have been buying gold to diversify their own reserves.

• Industrial Use: We often forget that silver and gold are used in things like electric vehicles and AI hardware. High demand there pushes prices up, too.

The "Rent-Free" Tenant

Here is the most critical concept I want you to understand about precious metals, especially for those of you in or near retirement.

When you own a stock, you own a piece of a company that (hopefully) makes profits and pays dividends. When you own a bond, you are lending money and getting paid interest. Your money is working for you.

Gold is different. It is a commodity. It sits in a vault (or a fund). It doesn't pay dividends. It doesn't pay interest. It doesn't generate earnings.

Think of it like a tenant living in your rental property who refuses to pay rent. The only way you make money on that house is if someone else comes along later and agrees to buy the house from you for a much higher price than you paid. That’s speculation, not necessarily investing.

A Look at the History Books

History teaches us that gold is prone to massive "boom and bust" cycles.

• The 1970s: Gold skyrocketed during the stagflation era, peaking in 1980.

• The Hangover: After that 1980 peak, it took 27 years for gold to reach that price again. Imagine retiring in 1980 with a portfolio heavy in gold and waiting until 2007 just to break even!

• The Recent Rally: Yes, gold has done well recently. But if you look at the charts since 2007, the S&P 500 (the stock market) has also performed incredibly well.

The market has risen because companies grew. Gold rose because fear grew. Which foundation do you want to build your retirement income on?

Does Gold Have a Place in Your Portfolio?

Now, I’m not saying gold is "bad." It can have a role. We call it a diversifier.

Think of your portfolio like a well-balanced diet.

• Stocks and Bonds are your protein and vegetables—the core nutrients that keep you healthy and growing.

• Precious Metals are like a multivitamin or a specific supplement. You might take a little bit to cover specific gaps, but you wouldn't try to live on vitamins alone.

If we look at a broad basket of commodities, gold and silver are often included to help smooth out the ride when stocks zig and bonds zag. But they are volatile. Silver alone has seen wild swings recently. If your entire nest egg was in silver, those swings would likely keep you up at night.

The Bottom Line

It is always tempting to chase the "hot" investment. But successful retirement planning isn't about predicting the price of an ounce of metal next month. It’s about constructing a portfolio that provides you with income and security for the next 30 years, regardless of what the Fed does in May.

If you are worried about inflation or market stability, let's look at your whole defensive strategy—your financial moat—rather than just buying gold bricks.

Next Step: Are you concerned that your portfolio is too exposed to market swings, or are you wondering if you have the right "insurance" in place? Let's schedule a 15-minute review to look at your asset allocation and ensure your financial house is built to weather any storm.