Gold and silver prices have staged a significant rebound after experiencing three consecutive sessions of steep declines, bringing relief to investors who witnessed a brutal correction phase. However, a widely circulated video on social media platform X has highlighted a contrasting perspective from a veteran fund manager who views these precious metals very differently.
Fund Manager's Counter-Intuitive Investment Framework
The video clip, shared by user Ashish Kumar Meher, features Sankaran Naren, Executive Director and Chief Investment Officer at ICICI Prudential Asset Management Company, explaining his unique framework for approaching gold and silver investments. Rather than treating these assets as standalone opportunities, Naren strongly advocates for investing in them exclusively through multi-asset mutual funds.
"In the framework in which we invest, gold and silver has become the most dangerous assets, if I take a long term view," Naren stated emphatically. "In my framework, that time is gone. In my framework the time to invest in gold and silver is gone. The only way you can invest in gold and silver is through multi asset funds, other than that we don't believe in investing in gold and silver, simply because of the fact that gold and silver has been the best performing asset class in the world at this point."
Historical Perspective on Asset Performance
Naren's investment philosophy is rooted in a simple yet counter-intuitive principle: investors should avoid asset classes that have recently delivered exceptional returns and instead focus on those that have struggled for multiple years. He explained this approach by drawing parallels to historical market behavior.
"Its very simple, you look at VERY Good past performance," Naren elaborated. "So go back to the year 2013, Indian real estate was the best performing asset class, Indian equity was pretty bad for the last 5 years, so if you look at it at that point of time it was very simple that you are to move from Indian real estate to Indian equities. So the best way to choose an asset class, in my opinion, if you have many years where an asset class has done very badly, then you should be positive on that asset class. On the other hand, if an asset class has done extremely well in the recent past."
Current Market Recovery and Price Movements
Despite Naren's cautious stance, precious metals markets have shown remarkable resilience in recent trading sessions. Silver rates rebounded sharply, climbing over 14% after the announcement of the India-US trade deal, following a correction phase that had dragged prices down more than 46% from their peak in just three sessions.
On Tuesday, February 3, MCX Silver prices rallied as much as 14.4% to reach an intra-day high of ₹2,36,261 per kilogram. Meanwhile, MCX Gold prices also demonstrated strength, rising 6.5% to ₹1,53,460 per 10 grams, indicating broad-based recovery across the precious metals spectrum.
International Market Dynamics
In global markets, spot gold rebounded sharply with gains of up to 4.2%, moving above $4,855 per ounce after having fallen 4.8% in the previous session. This decline had compounded Friday's significant slide, which market observers described as the sharpest single-day drop in more than a decade.
Domestic market sentiment improved substantially following the India-U.S. trade agreement, though investors continued to monitor broader global factors including geopolitical tensions, currency fluctuations, and expectations surrounding U.S. monetary policy leadership. Additional support for bullion demand emerged from robust retail buying in China ahead of the Lunar New Year celebrations, though Chinese markets will remain closed for over a week starting February 16, temporarily removing a key source of demand from the global equation.
Geopolitical Factors Influencing Precious Metals
Market participants are also closely watching developments related to Iran after U.S. President Donald Trump indicated that negotiations over a potential new nuclear agreement might occur soon. Any diplomatic progress on this front could potentially diminish gold's traditional safe-haven appeal and significantly influence future price movements in precious metals markets.
The contrasting perspectives between the current market recovery and Naren's cautious investment approach highlight the complex decision-making environment facing investors in precious metals. While short-term price movements show resilience, long-term investment strategies require careful consideration of historical performance patterns and asset allocation principles.
Disclaimer: The views and recommendations presented above are those of individual analysts or broking companies, and not of Mint. Investors are advised to consult with certified financial experts before making any investment decisions regarding gold, silver, or other asset classes.
