Gold Rallies to Fair Value, Investors Advised to Trim Exposure

As of October 8th, 2025, gold has rallied to its fair valuation zone, trading around $3,895 per ounce, slightly above the modeled midpoint of $3,825 per ounce. This marks gold's strongest run since 1979, driven largely by central bank buying, a weaker U.S. dollar, and global political uncertainty.

While the gold bull market remains intact, analysts at DSP Asset Managers advise investors to stay invested but turn cautious. The report suggests that gold has moved into the upper end of its fair value range, and short-term pullbacks are likely. Investors sitting on hefty gains could consider gradually reducing exposure, trimming 5% per week until half of their overweight position is cut.

In contrast, silver still has room to run. DSP estimates silver's theoretical fair value in the range of $53-75 per ounce, with a midpoint near $64 - meaning the metal, currently around $47, remains undervalued. Silver's catch-up potential stems from its dual role as both a precious metal and an industrial commodity, benefiting from clean energy, electronics, and solar demand.

For retail investors, silver presents an attractive tactical opportunity within a precious metals allocation, particularly through silver ETFs or mutual funds. The report advises adding silver on corrections, especially if the gold-to-silver ratio stays above 80.