Going into 2026, the market is divided.
Will the AI boom continue?
Or should we hedge against a massive market correction?
We’ve seen the headlines for years. AI is the most hyped growth engine since the dot com boom. Sky high valuations already fueled massive spikes from tech stocks, with some calling it the next frontier.
But after the dot com boom … There was a bubble burst.
Concerns now swirl around overextended AI valuations, bubble risks, and narrow market leadership that could trigger panic and volatility across the market.
Conversely, gold and silver surged to record highs in the final weeks of 2025. The overwhelming demand is driven by safe-haven demand, tight supply, and central bank buying that could push prices even higher in 2026.
It’s as if investors are shifting out of AI and buying gold as a hedge for what’s to come in the new year.
So here’s the question: Do we trust the AI boom to lead us higher next year? Or do we hedge with gold and precious metals that are already roaring?
Both narratives are powerful and both have real world catalysts to fuel momentum in the market.
The Boom Powering Growth But Raising Fears
As we head into 2026, the AI narrative is still huge.
Not just in tech circles, but in the global economy.
AI investment ballooned at unprecedented levels, with global private and corporate AI spending hitting record highs and continuing to grow year-over-year.
In fact, corporate AI investments climbed into the hundreds of billions in 2025, contributing notably to U.S. GDP growth as tech companies poured capital into data centers, semiconductors, and AI infrastructure. At times driving more economic expansion than traditional consumer spending.
The AI market is now deeply embedded in the expansion of the digital economy, which is now projected to top $1 trillion in the long term.
But with all the excitement comes real concern.
Analysts increasingly warn that AI valuations may be stretched, echoing the dot-com era’s mania.
Rapid rises in AI-related stock prices lead some experts to flag bubble risks. If a correction hits in 2026, AI sectors could see sharp volatility. Which might ripple into broader economic weakness given how central the technology has become.
That’s where the precious-metals hedge enters the conversation.
It’s not necessarily a bet against AI’s potential. More of a buffer against the volatility we could see in 2026.
The Old-School Hedge That’s Roaring Into 2026
While the AI boom captures headlines, precious metals are quietly stealing the stage as one of 2025’s most dramatic market stories.
And the momentum appears to be carrying into 2026.
Gold surged into unprecedented territory, breaking above $4,500 an ounce and extending one of the strongest structural rallies in modern market history.
This is a broad uptrend driven by multiple powerful catalysts.
At the heart of gold’s rise is safe-haven demand amid economic uncertainty.
But we can also attribute the recent bullish nature to persistent geopolitical tensions, the prospect of U.S. interest rate cuts, and ongoing central bank accumulation.
Here’s My Gold Sector Watchlist.
Silver has also exploded, touching all-time highs above $80 per ounce before some minor pullbacks. The move reflects both investment demand and growing industrial use.
As AI faces valuation scrutiny and potential corrections, gold and silver offer traders a rock-solid alternative in a market where uncertainty is now its own asset class.
What’s My Prediction?
In the famous words of Robert Burns, “The best laid plans of mice and men often go awry.”
We don’t make predictions about the market. Leave that to the talking heads on CNBC.
Our goal is to react to the price action. Let the market tell us what it wants to do. Pay attention to the trend.
Right now, I’m eyeing trades in both sectors, because that’s where the volatility is.
For example, I bought put contracts for the iShares Silver Trust (NYSE: SLV) on Friday around noon, December 26. Read my alert below:
Then I alerted traders on Monday morning, December 29, to sell at least half of the position for a nice gain.
Look at the alerts overlaid on the chart below. Every candle represents one trading minute:
Remember, with options contracts, we can take advantage of volatility that goes both ways.
Instead of short selling, we can buy put contracts.
From Friday to Monday, we rode a silver correction lower after a blow off top that made new all-time highs.
I’m not bearish on the silver sector, I’m just playing the volatility that the market gives me. The volatility that I see on the chart.
As we enter 2026, I’m watching the AI and precious metal sectors very closely.
Keep an eye out for my next trade alert.
Stay Street Smart,
Jeff Zananiri
