The expected average return for physical gold and silver is just inflation while the expected standard deviation (risk) is very high. As a result, the optimum asset allocation to physical gold and silver is 0%. It is not near the efficient frontier. If you want to purchase some physical precious metals, we recommend limiting your purchase to 3-5% of your investable assets. An investment is something which pay you money. By that definition, gold is not an investment.

We recommend you use resource stocks as an inflation hedge. Investing in commodity based stocks is different than investing in commodities or commodity futures. Here are some articles to expand on these principles:

Safeguard #4: Buy Investments That Trend Upward	Investing in gold and silver coins	Mailbag: I’d like to withdraw money from my IRA to purchase physical silver.	Investing In Gold
Asset Allocation and the Efficient Frontier	How keeping your money “safe” might lose half of it in 16 years.	Hedge Inflation Risk with Hard Assets	Inflation Part 3: Protecting Yourself Against Inflation
Gold Mining Companies Glitter More Than Bullion	Invest in All Six Asset Classes	‘Go Fishing’ With Hard Asset Stocks	Limit Your Investment In Gold and Silver To Less Than 3% of your Portfolio
The Optimum Asset Allocation to Gold Is Always Zero		Subscribe and receive the free presentation: If Not Gold, Then What?