A Small Lucky Detour into Precious Metals

This is not an account about skill, foresight, or macro-brilliance.

This is a short account of how I ended up owning a small amount of physical gold and silver, largely through chance, modest curiosity, and a bit of luck, and what that experience taught me about diversification.

How It Began

I bought my first piece of physical gold in February 2024.  I was hoping to slowly dollar cost average into gold, buying one ounce yearly to accumulate my position in precious metal, as a form of diversification. 

There was no strong thesis behind it.  I was not trying to bet against fiat currencies or make a bold macro call.  It felt more like owning something tangible outside the financial system, even if the position itself was small.  I remember I was mocked by someone online, someone whom I did not know personally, for buying that piece of gold near all time high at that time.

However as time passes, prices of gold climbed to further highs and it became out of reach for me to dollar cost average into it yearly.  As such, in 2025, I decided to change my target of accumulating gold, to accumulating silver into my portfolio.  Therefore, in March 2025, I made my first purchase of physical silver.

I added a bit more silver again in May 2025, still without any strong conviction, but with some words of wisdom from a friend in Telegram Group.  At that point, precious metals were firmly in the “minor diversification” category of my portfolio.

When Prices Started Moving

Things changed in August 2025, when silver prices began to rise at an alarming rate with gold prices already hitting new all time highs - and then continued rising quite aggressively playing the catch up game.  The daily price increases gradually came into spotlight and became noticeable to investors and media.  By the end of December 2025, silver ended being up more than 146% year-on-year.  It is at this time, both gold and silver, despite my relatively small purchases, had grown to around 1% of my total investment portfolio.  As of mid-January 2026, prices for both gold and silver continued the upward trend and soared to new all time highs, with gold hovering around SGD 5,900 per ounce and silver hovering around SGD 118 per ounce.

That number is important to keep in perspective:

a)     It is not a meaningful driver of my overall returns

b)     It does not alter my long-term financial plan

c)     It remains intentionally small

Late Additions: Small and Honest Fear Of Missing Out (FOMO)

I did make additional silver purchases in November and December 2025, but these were very small additions.  By then, prices had already risen significantly.  These buys were less about strategy and more about mild FOMO - topping up at higher prices while being fully aware that the risk-reward had changed.  Looking back, I do not view these late purchases as particularly smart or disciplined.  They were simply small, emotional decisions that did not materially affect my portfolio either way.  Thankfully, prices rose after my purchases and broke even after 3 business days.  Once again, I attribute this to luck.

Gains Were Captured, But That Was Not The Point

The gains from precious metals were real, but small in absolute terms.  They did not meaningfully move the needle on my net worth, and I never expected them to.  What mattered more was that this allocation:

a)     Added a layer of diversification

b)     Behaved differently from equities and income assets

c)     Was not tied to corporate earnings or dividend policies

Despite the strong price move, precious metals remain a small part of my portfolio, and that is by design.  The reason is straightforward.  Gold and silver do not generate cash flow.  They pay no dividends, produce no income and do not compound on their own.  As a dividend-focused investor, I prioritize assets that generate recurring cash flow and support long-term sustainability.  Precious metals however do not do that.  Their value depends entirely on price movements.  That makes them unsuitable as a core holding for me.  However, with many countries stacking up precious metals and staying away from US Treasuries, the threat of debasement of the US dollar and fiat currencies remains true, and slowly building up precious metals in my portfolio may be the right move after all.

What Role Do Precious Metals Play

Precious metals serve a limited but clear role in my portfolio:

a)     Diversification

b)     A hedge against extreme currency outcomes

c)     Exposure to assets outside the financial system

They are not meant to outperform equities or replace income-producing assets.  They exist to reduce concentration risk, not to maximize returns.  In that sense, even a small allocation of less than 2% has done its job.

What I Will Do Moving Forward

These days, instead of buying precious metals blindly, I am slowly learning how to play the precious metals game more thoughtfully, using a simple but time-tested metric: the gold-to-silver ratio.  The ratio measures how many ounces of silver are needed to buy one ounce of gold, and vice versa.  Rather than predicting prices, I use it as a relative value guide.

My rough framework looks like this:

a)     When the gold-silver ratio (historical gold-silver ratio chart shown below) is above 1:80, silver is historically cheap relative to gold.  In this situation, I would consider buying more silver, gradually and in small amounts.

b)     When the gold-silver ratio falls below 1:30, gold becomes comparatively cheaper.  At that point, I would either buy more gold, or convert some silver holdings into gold.

Then the cycle repeats.

The goal is not to trade frequently or chase short-term gains, but to accumulate ounces over time, slowly improving the composition of the stash without injecting fresh capital unnecessarily.  Do note that all these are what I have learnt online in theory, and has not executed any of these acts yet, as my current holdings are too small to do any conversion meaningfully.  Moreover, as of end December the gold-silver ratio stood around 1:60, which is time for me to do nothing.  I guess it is still learning in progress for me at this juncture.

Still a Supporting Actor, Not the Main Character

Even with this framework, precious metals will remain a supporting actor in my overall investment strategy.

I do not intend to aggressively increase allocation, rely on metals for great returns, or treat them as a replacement for productive assets.  My core remains to be income-generating investments that support long-term cash flow and financial resilience, like dividend-paying shares.  Precious metals simply sit alongside them, quiet, boring, and occasionally useful, with a possible maximum allocation of around 5% in the near future, unless macro-economical environment change in a big way in time to come, then perhaps my target may change accordingly.

Looking back, this journey was shaped far more by luck than skill.  I was introduced casually, acted without conviction, and benefited from favourable timing.  Acknowledging that helps me stay disciplined and prevents me from FOMO-ing and over-allocating just because prices moved.  If there is one takeaway, it will be "diversification does not need excitement or strong conviction to work".  I just did it, for it to do it's job.  

Most importantly, do note that the above is not financial advice.  Buying precious metals has its risks, especially when prices of precious metals are hovering around all time highs now.  Do note that the previous all time highs for silver was back in 2011.  This means that if one chased silver investments back in 2011, it took 14 years for the investment to break even, especially when silver do not pay dividends or generate any form of income unless sold.  Thus investors have to be careful and evaluate personal circumstances and do your own due diligence.  Barista FIRE, here I come...!