The past several years have been trying times for the precious metals complex. Plunging prices for gold, silver and platinum from 2013 through 2015 caused those metals to lose their sheen and investors to punish the exchange-traded products that track them. Platinum, whose fortunes rise and fall with the automobile sector, held up better until 2015. Last year saw improved performance across the board through the first half of the year, only to see the rally lose steam in the second half—hampered in part by a post-election sell off.

But precious metals on average are gleaming so far in 2017. Steve Dunn, executive director and head of the U.S. business at ETF Securities, recently talked with ETFA about the fundamentals behind precious metals. In 2003, his firm developed the world’s first gold exchange-traded product. Its lineup of U.S.-listed exchange-traded funds comprise the ETFS Physical Swiss Gold Shares (SGOL), ETFS Physical Silver Shares (SIVR), ETFS Physical Palladium Shares (PALL), ETFS Physical Platinum Shares (PPLT) and ETFS Physical Precious Metals Basket Shares (GLTR) funds.

ETF Securities plans to expand its product lineup with the expected first-quarter launch of a suite of six actively managed, commodities-based ETFs. Below is the excerpted conversation with Steve Dunn.

ETFA: What’s driving the solid showing among precious metals so far this year?

Dunn: The fundamental case for commodities is strong right now. Have things run too fast? There’s always a concern that things get ahead of themselves. For example, palladium has been leading the way most of this year, and palladium has a strong link to auto sales, which have been strong in places such as China. As long as strong demand remains on the auto side, and palladium is the main source material for catalytic converters, then that creates demand for palladium.

Palladium and platinum are the two primary metals used in the auto industry. Palladium is used in gas engines; platinum is used more in diesel engines. Platinum has more uses than palladium, but continued strength in the auto market would help both metals.

ETFA: Gold dominates the headlines regarding metals, with silver rarely in the spotlight. What’s the fundamental case for silver?

Dunn: From a fundamental standpoint, silver is probably the most attractive of the metals because it has dual uses: it’s used both in jewelry and for industrial applications such as electronics and solar power. It’s also showing up in athletic wear because it can absorb smells from sweating. And it’s also used in the solar industry, so if solar plays a larger role in the U.S., silver is a natural benefactor of that.

Overall, they [precious metals] are often used more as tactical components [in a portfolio]. Each of the metals represent a theme, so you’re not necessarily investing in a particular metal versus investing in what that theme is.

ETFA: Gold prices seem to go up and down like a yo-yo. Are some market conditions better than others to buy gold?

Dunn: You have to look at gold in portfolio terms regarding its role in a portfolio and what does. It does mitigate risk, which is a little crazy because gold does have some volatility. But it tends to have volatility at the right times.

There are certain times that are better to own gold. There’s an argument that investors should own it all the time. The challenge now is there are mixed signals. You typically don’t want own gold in a rising rate environment. The knock on gold is that it doesn’t spin off income, so some people see it as a dead asset that doesn’t earn anything.

The counter to that is Donald Trump saying the price of the dollar is too high, and trying to drive that down would be very supportive toward gold’s outlook going forward. Gold is off to an okay start in 2017, but not as well as the other metals as people try to sort out the mixed signals.

ETFA: What percentage of a portfolio should be allocated to gold?

Dunn: Traditionally, we see anywhere from 2 percent to 5 percent in client portfolios among financial advisors.

ETFA: Is that enough? Does that do the job of diversification?

Dunn: A little bit. It depends on what they mix it with. Gold typically falls into the alternative category. Does gold standing alone [at 2 percent to 5 percent] do enough? Maybe not.

ETFA: How do investors use your products?

Dunn: Hedge funds play the metals more on the tactical side, but the asset base has actually remained more solid. Certainly, gold has been more sticky than some of the others. Last year we saw asset growth and not a whole lot of outflows, even after the election when the metals markets sold off. That was more of a price impact than a redemption impact.

When we think about bringing new products to market we’re much more interested in playing in a bigger basket. We have products in filing with the SEC we hope come to market relatively soon that will be broader based and will include the metals group and other commodities. GLTR is our first attempt at putting together a basket of metals. The challenge of having a physical component is there are only so many commodities you can do in a physical basket.

ETFA: GLD is the big gorilla in the gold ETF space. How does your SGOL fund differ?

Dunn: When people think gold, they think GLD. The founder of our firm, Graham Tuckwell, launched the world’s first gold ETP in 2003 in Australia, but unfortunately not in the U.S., where we were third to market behind GLD (SPDR Gold Shares) and IAU (iShares Gold Trust). At the end of the day, do these structures all basically work the same? Yes. We believe we put some stops in to protect our shareholders. We store our gold in Switzerland. Having it vaulted somewhere other than the U.S. provides some folks with a perception of safety—people have told us they specifically sought out our products for that reason.

ETFA: Do you believe the current rally in precious metals is sustainable?

Dunn: You’ve seen a surge in the early part of this year, with strong fundamentals across the board. In some of those metals it’s a supply-and-demand game, where there’s more demand and not enough supply coming on board.