Why Investors Should Rethink Gold, Silver Now: ICICI's S Naren Sounds Alarm

Investors flocking to gold and silver at record levels may be setting themselves up for long-term pain, cautions S Naren, Chief Investment Strategist at ICICI Prudential Mutual Fund.

Speaking on a podcast with ET Money, Naren flagged the danger of what he calls “anti-asset allocation” — the tendency of investors to rush into an asset class only after it has delivered strong returns. “It doesn’t go wrong in the short term, but in the long run, it does,” he warned.

His remarks come at a time when flows into gold and silver ETFs are rising sharply, with both metals beating equity performance over the past year. But that, Naren argues, is precisely the red flag.

“People are waking up to silver today because it has rallied. But does silver pay dividends? Does it earn interest? Can you value it on P/E? No,” he said, urging caution against momentum-driven bets.

According to Naren, fascination with gold today mirrors a familiar investing trap: chasing returns after a rally. Instead, he suggests precious metals should only play a limited role within a broader, diversified portfolio. “Gold and silver only make sense within a multi-asset framework. That way, you avoid overexposure and maintain balance,” he explained.

His parting advice is blunt: successful investing is more about behaviour than math. “The biggest mistake investors make is chasing returns after the fact,” Naren said.

Disclaimer: The gold and silver prices mentioned are based on prevailing market trends and sources believed to be reliable. Actual rates may vary across cities, jewellers, and due to additional factors such as making charges, GST, and international fluctuations. The information provided is for general knowledge only and should not be considered as financial or investment advice. Readers are advised to verify prices locally and consult a certified financial advisor before making any purchase or investment decisions.