Gold and silver have traditionally been seen as stores of value and potential protection against inflation and economic uncertainty. But after a strong run, both have experienced sharp price falls. So what’s happening, and what does it mean for your SMSF?
Gold and silver have been making headlines again, but this time it’s because prices have been falling.
According to ABC Bullion, gold fell almost 6% and silver nearly 9% in US dollar terms during September 2026. Prices remained volatile in October, with gold dipping below A$6,000 an ounce.
Yet despite those falls, gold was still up almost 10% and silver nearly 30% in US dollar terms over the 12 months to the end of September.
It’s a useful reminder that even investments traditionally considered defensive can experience significant price swings.
Why are prices falling?
Several factors can influence precious metal prices, including interest rates, currency movements, investor demand and expectations about the global economy.
During periods of uncertainty, demand for precious metals can increase as investors look for alternatives to other assets. But changes in market sentiment, interest rate expectations and currency movements can also lead to sharp price falls.
Both metals are traded internationally in US dollars. For Australian investors, movements in our exchange rate can make a significant difference to the price we actually pay or receive.
Silver has another complication. A substantial amount of silver is used in manufacturing, electronics and solar panels. That means its price is also affected by industrial demand, making it generally more volatile than gold.
Aren’t gold and silver supposed to be safe investments?
Gold has traditionally been viewed as a defensive investment, a store of value and a potential hedge against inflation. Investors often turn to it during periods of economic uncertainty, currency weakness or instability in financial markets.
Silver shares some of these characteristics, although its industrial uses make it less predictable.
But defensive doesn’t mean risk-free.
Gold has helped preserve purchasing power over very long periods, but it doesn’t reliably protect against inflation in every year. Both gold and silver can experience substantial price falls, sometimes lasting years.
That’s why it’s important to understand the role these investments play in your overall retirement plans, rather than judging them on short-term price movements alone.
What should SMSF owners consider?
If your SMSF owns gold or silver, recent price movements are a good reason to review how those investments fit into your overall retirement plans.
Why are you holding it? Is it for diversification, long-term wealth preservation or because you expect prices to rise? Understanding your reasons helps you assess whether the investment still suits your objectives.
How much of your SMSF is invested in bullion? If prices have risen significantly since you purchased it, precious metals might now represent a much larger percentage of your fund than you originally intended.
Can you access your money when you need it? Physical bullion can generally be sold, including selling part of your holdings rather than everything. The important considerations are how quickly you can sell, the price you’ll receive and any associated costs. Your SMSF needs sufficient accessible cash to meet expenses, tax liabilities and any pension payments.
Does it still fit your investment strategy? SMSFs must regularly review their investment strategies, including risk, diversification and liquidity. That doesn’t mean changing investments whenever prices move, but it does mean understanding whether they still suit your fund.
Feeling like you’ve made a loss?
Watching the value of your gold or silver fall can be unsettling, particularly after such a strong run. But a fall in market value isn’t the same as a realised loss. If you haven’t sold, you still own the same amount of bullion, although its market value may have fallen.
Prices can recover or fall further, so it’s important to keep the longer-term picture in mind.
Super is a long-term game. Every asset class, whether it’s property, shares, gold, silver or something else, experiences ups and downs. What matters is how your investments perform over time and whether they continue to suit your retirement plans.
The point isn’t to panic when prices fall or rush to buy when they rise. It’s to stay informed, understand what you own and make considered decisions rather than emotional ones.
Nobody knows exactly where gold or silver prices will go next. But you don’t need to predict every market movement to manage your super thoughtfully.
Know what you own, understand why you own it and make sure it still fits your investment strategy.
At Freedom Financial Solutions, we help SMSF owners understand the accounting, tax, compliance and administration requirements associated with their investments, including physical gold and silver bullion.
Learn more about SMSFs at Freedom Financial Solutions
General information only. This article does not constitute financial or legal advice. Past performance is not a reliable indicator of future returns.