Foundations of wealth: Understanding gold and silver in today’s markets

Dubai: For centuries, gold and silver have been the backbone of money. Unlike paper currencies that can be printed at will, these metals are finite, globally recognised, and trusted as lasting stores of value.
They’re presently central to global finance, serving as reserve assets backing currencies; hedges against inflation and crises; and safe havens during political and economic uncertainty.

In September 2025, the inflation-adjusted price of gold climbed to $3,646 per ounce, one of the highest levels recorded since 1980 (GuruFocus). Adjusting for inflation allows observers to compare today’s gold with past peaks in real purchasing power, not just headline prices.

While nominal records may look impressive, inflation-adjusted figures reveal whether gold is genuinely stronger or simply reflecting currency weakness. By returning to historical highs in real terms, gold demonstrates its enduring ability to preserve wealth across decades.

According to Trading Economics, the US still holds the world’s largest official gold reserves at 8,133 tons. China has steadily increased its holdings over the past decade to around 2,298 tons, while the UAE has built up its own reserves to about 74 tons across the decade, reinforcing its role as a global bullion hub.

Today, gold valuation reflects a mix of Federal Reserve rate cut, trade uncertainty, political instability across major economies, and persistent geopolitical conflicts from Ukraine to the Middle East, where investor demand for gold, and increasingly silver, remains strong.

Silver shines again

Silver is once again approaching its all-time high near $50, having broken out of a long-standing price channel above $41 that has been held since 2022. Momentum remains strong, but indicators are flashing overbought levels last seen in 2011 and 2020, when rallies were followed by sharp corrections. While short-term pullbacks remain possible, the long-term outlook is supported by silver’s dual role: rising industrial demand from technology and AI, alongside its appeal as a traditional safe-haven asset.

Unlike silver, gold has set new all-time records, and this month it matched its inflation-adjusted peak last seen in 1980. Price action has also broken out of a long-term channel dating back to 2016, with markets now eyeing the $4,000 level. This aligns with the target of a technical formation known as a cup-and-handle pattern, in place since 2011.

After consolidating below $3,500 for five months, gold surged more than 7% in a single week above $3,600. In technical terms, the longer the consolidation, the sharper the breakout tends to be. With the primary uptrend intact, short-term pullbacks may provide potential “buy-the-dip” opportunities, though traders must remain cautious given gold’s tendency for sharp swings.

In a nutshell, gold and silver remain essential hedges in today’s uncertain world. While gold leads with record highs and silver shows strong momentum, both metals continue to prove their value as long-term foundations of wealth.

- The writer is market analyst, CMT at FOREX.com