Faced with the risk of monetary debasement posed by state debt, precious metals and cryptocurrencies are emerging as a safe haven.
As economic and geopolitical uncertainties intensify, inflation could once again threaten investment portfolios. How to preserve your capital in the face of this monetary erosion? Gold and silver, with their unique properties, reaffirm their role as assets of choice in turbulent times.
Inflation, characterized by a general rise in prices, gradually reduces the purchasing power of households. Economic policies, such as those promoted by the Trump administration (tariff barriers and migration policies), or structural phenomena such as demographic aging and increased energy demand, fuel this phenomenon. In this context, a key question remains: where to invest your money to protect its value?
Historically, gold and silver have proven successful as hedges against inflation. Unlike fiat currencies, whose creation is unlimited, these metals are rare and their supply depends on natural resources. This scarcity, combined with constant demand, ensures their long-term stability.
- Gold: an essential safe haven – Gold is prized by central banks, investors, and industry. Around 40% of the world’s gold is held for investment or reserve purposes, while 50% is used in jewelry and 10% in technology sectors. An ideal electrical conductor and resistant to corrosion, it is used in various fields: electronics, aerospace, and even medicine.
- Silver: a versatile metal – Silver, more accessible, sees 50% of its production intended for industry, particularly in solar panels, batteries and electronic devices. Its role in renewable energies and ecological transition reinforces its attractiveness. The rest is divided between jewelry (25-30%) and investment (15-20%).
Precious metals are distinguished by their diversity of uses. In addition to protecting wallets, they support innovation in essential sectors. For example, gold is used in satellites for its ability to reflect heat, while silver is crucial for making solar panels. Demand for solar installations could accelerate sharply and push silver prices higher. The gold/silver ratio is currently around 84x compared to 65x at the peak of 2020. If the supply/demand imbalance worsens, a scenario like in 2020 could emerge and the price of silver could easily exceed 40 dollars per year. ounce (i.e. +29% above the current level).
Precious metals versus Bitcoin: the battle of safe havens
Bitcoin, often referred to as “digital gold”, also attracts investors looking for assets uncorrelated from traditional markets. However, major differences remain:
- Stability: Unlike precious metals, Bitcoin is extremely volatile, making it less suitable for value preservation. Money, already considered a volatile asset with a monthly amplitude of 10% to 30%, however remains well below bitcoin whose volatility oscillates between 60% and 100%.
- Regulation and adoption: While gold benefits from a structured and stable market, Bitcoin remains influenced by regulatory decisions and speculative movements. The election of Donald Trump as President of the United States and his promises of financial deregulation have contributed to the surge in cryptocurrencies including bitcoin. It touched the $100,000 mark for the first time on December 5 (+50% since November 5).
Thus, gold and silver retain their status as traditional safe havens, while Bitcoin still appears as a speculative asset.
Future outlook: gold at the heart of diversification
In a tense geopolitical context, the central banks of non-NATO countries are increasing their gold reserves, diversifying their holdings away from traditional currencies like the dollar or the euro. The freezing of Russian foreign exchange reserves was an electric shock for countries not allied with the United States. This trend reflects a quest for stability in the face of global economic uncertainties.
Gold and silver prices are expected to continue their growth in the face of falling inventories. Most silver comes from refining copper, gold, lead and zinc. However, the production of these minerals has tended to decrease in recent years due to the lack of investment in exploration and production.
At the same time, the valuation of gold mines is attractive while cash flows have clearly increased since the second quarter of this year. The more the gold price appreciates, the stronger the operational leverage for mining stocks. Current valuation multiples do not reflect the health of companies but a discount for past mistakes and fears about rising extraction costs.
Today, EBITDA margins average around 35%. Net profit growth is expected to be double-digit in 2025. Most analysts have valued mining companies on an average gold price well below the current price. However, these should benefit from more stable and larger production volumes and better cost control.
Conclusion: an ally against inflation
By combining security, industrial utility and scarcity, precious metals are emerging as judicious choices for confronting inflation and economic upheaval. If financial innovation, embodied by Bitcoin, offers new perspectives, gold and silver remain essential pillars for protecting and diversifying portfolios.
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