Should You Consider Investing in Gold or Silver Jewellery During Market Volatility?

Market volatility is normal, but current indicators suggest heightened risk. The U.S. stock market appears overvalued, with measures like the Buffett Indicator showing total market capitalisation significantly above GDP. As of October 2025, the Buffett Indicator is at 220.4%, indicating the market is significantly overvalued relative to the economy.

The S&P 500 has averaged around 10% annualised returns over the long term. However, sharp declines have occurred, such as during the dot-com bubble (2000–2002) and the 2008 financial crisis, when peak-to-trough losses exceeded 40%. This illustrates why diversification and hedging strategies, like holding precious metals, are worth considering.

Gold and silver have shown resilience during uncertain times.

Gold: From ~£15 per ounce ($35) in the early 1970s to £1,500–£1,600 ($1,900–$2,000) in 2024, approximately a 100× increase. Gold historically performs well during economic downturns and as a hedge against inflation.

Silver: From ~£1 per ounce ($1.50) in the early 1970s to £18–£22 ($22–$28) in 2024, about 20× increase. Silver’s industrial uses in electronics, renewable energy, and healthcare add unique demand dynamics.

During crises, both metals often outperform equities. In 2008, while the S&P 500 dropped >40%, gold prices rose, and silver remained resilient despite higher volatility.

To find out more on each precious metal's jewellery, read our blogs on Is It Worth Investing in Gold Jewellery? and Is It Worth Investing in Silver Jewellery?.

Asset 1970 Price vs 2024 Price Approx. Growth Notes:

-Gold £15 ($35) £1,550 ($1,950) ~100× Strong hedge during crises

-Silver £1 ($1.50) £20 ($25) ~20× Supported by industrial demand

-S&P 500 ~£60 ($90) ~£4,500 ($5,700) ~75× Includes periods of high volatility

Observations:

Precious metals grow steadily and provide protection during market downturns.

Silver may see future value growth due to industrial and technological demand.

Stocks offer high long-term returns but with increased short-term risk.

Certified, High-Purity Pieces: Focus on 18k–22k gold or sterling silver (92.5% purity) with certification. Certification ensures value is primarily in the metal itself and facilitates resale.

Long-Term Perspective: Precious metals are best held for the long term. Short-term price fluctuations occur, but historical data supports wealth preservation over decades.

Liquidity and Practicality: High-quality jewellery is tangible, wearable, and highly liquid. This flexibility is advantageous during market volatility when equity liquidity may be affected.

Volatility: Silver’s dual role as a commodity and precious metal creates price swings.

Resale considerations: Retail jewellery premiums may not fully translate to resale.

Market timing: Precious metals are resilient, but short-term returns may lag equities in bull markets.

Investing in gold or silver jewellery can protect wealth during volatile or overvalued markets.

Gold: historically ~100× growth since 1970; reliable hedge.

Silver: historically ~20× growth; industrial demand may increase future value.

Diversification with jewellery helps balance risk alongside stocks and other assets.

Practical, certified pieces offer liquidity and tangible value, making them useful during uncertain market conditions.

Should you consider investing in gold or silver jewellery during market volatility? Yes, investing in gold or silver jewellery can be a prudent strategy during volatile or overvalued stock market conditions. Precious metals have historically maintained and increased in value during downturns, with gold showing ~100× growth and silver ~20× growth since the 1970s. Silver’s industrial applications may support future value increases. Jewellery offers the added benefit of being tangible, wearable, and liquid, making it a practical option for investors looking to protect and diversify their wealth during uncertain economic periods.

References:

World Gold Council, Gold Demand Trends Report 2024

Silver Institute, World Silver Survey 2023

LBMA, Historical Gold and Silver Data 1970–2024

Financial Times, Market Valuation Trends and Investor Behaviour (2024)