Gold, silver pullback overdone as macro tailwinds stay intact, High Yield Investor’s Smith says

[Eight common precoius Bullion Bars arranged into prism]
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Gold's (XAUUSD:CUR [https://seekingalpha.com/symbol/XAUUSD:CUR]) and silver’s (XAGUSD:CUR [https://seekingalpha.com/symbol/XAGUSD:CUR]) recent pullback does not reflect a deterioration in their long-term fundamentals, Samuel Smith of High Yield Investor said on _Seeking Alpha’s Investing Experts_ podcast.

Smith said gold’s near-term underperformance has been driven by factors including reduced expectations for Federal Reserve rate cuts, temporary pauses in central bank buying, and disruptions to physical trade flows amid geopolitical tensions.

He added that gold had already rallied strongly, making a period of consolidation likely, even as underlying drivers such as inflation risks and geopolitical uncertainty remain intact.

On silver, Smith said the metal lagged gold before rallying sharply, supported by a structural supply shortage and rising demand linked to electrification and artificial intelligence.

While both metals have pulled back after strong gains earlier in the year, he said their long-term outlook remains constructive, particularly as geopolitical fragmentation and rising U.S. fiscal deficits weigh on the dollar.

He added that these dynamics are likely to be a net negative for the dollar over time, which in turn supports gold prices.

Smith said he has been increasing exposure to gold on dips, including through select miners that have become oversold, while also maintaining positions in bullion-linked investments.

More broadly, he said investors can gain exposure to precious metals through both ETFs and individual miners, with the latter offering opportunities to capitalize on valuation dislocations.

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