The $4+ Trillion Precious Metals Wipeout:: Why Value Investors Rarely Touch Gold/Silver?

u/Comfortable_Fly_7943 · Reddit — r/ValueInvesting · February 02, 2026 at 12:17 · ⬆ 149 pts · 💬 111 comments  | View on Reddit ↗
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Investment research was identified, but its instrument is not eligible for priced Calls.

Unpriced research observations (excluded from Calls and Returns):

XAUUSD — AVOID The author argues gold lacks intrinsic earnings power, dividends and cash flows, so its value depends on the 'greater fool' theory and sentiment rather than productive output. He cites the recent collapse from around $5,600/oz to $4,700–$4,720 to illustrate the volatility of a non-cash-flow asset. He concludes gold does not fit a value-investing framework and should not be a core holding, though he allows that a small diversification allocation might make sense. Instrument validation: The source names a commodity or futures view, not the ETF proxy used by the native price mapping; no exact executable contract was established.

Its value hinges entirely on the "greater fool" theory: hoping someone else will pay more for it down the line based on fear, inflation hype, or macroeconomic stories.

XAGUSD — AVOID The author argues silver follows a similar speculative script to gold, with industrial demand still dominated by speculative flows rather than consistent value creation. He notes silver hit $120/oz before 30%+ single-day drops, now trading between $80–$83/oz, as evidence of sentiment-driven risk. He therefore excludes silver from a value-investing core allocation. Instrument validation: The source names a commodity or futures view, not the ETF proxy used by the native price mapping; no exact executable contract was established.

Silver follows a similar script, with some industrial demand but still dominated by speculative flows rather than consistent value creation.

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