Porinju Veliyath Issues Stark Warning on Gold and Silver as Precious Metals Tumble
As gold and silver prices experience a sharp decline from their recent peaks, veteran investor Porinju Veliyath, often referred to as the czar of small-cap stocks, has reiterated his stance against investing in precious metals. Veliyath emphasized that he has no regrets about avoiding these assets, labeling them as sentiment-driven with no underlying fundamental value.
Investor Caution on Speculative Assets
In a post on social media platform X, Veliyath advised investors to exercise caution when dealing with what he described as vague and speculative assets. "Investors need to be cautious on vague and speculative assets like gold, silver, bitcoin etc which have no fundamental values but are driven by sentiment and market frenzy," he stated. He added, "Discl: never regretted for staying away."
His comments come at a critical juncture when precious metals are facing heavy selling pressure. A brief rebound earlier in the week was completely erased by a global selloff in technology stocks and a strengthening U.S. dollar. This sharp correction has reignited the ongoing debate over whether gold and silver can be considered reliable safe havens or if they are merely momentum-driven trades during periods of high volatility.
Sharp Decline in Precious Metal Prices
The selloff has been severe and widespread. Silver has plummeted nearly 50% from its peak of approximately ₹4.2 lakh per kg, while gold has fallen almost 23% from its recent high. The weakness intensified as deteriorating risk sentiment across global markets pushed investors towards the U.S. dollar, thereby pressuring non-yielding assets like precious metals.
On Friday, MCX silver prices dropped as much as 6% intraday, touching a low of ₹2,29,187 per kg. Meanwhile, MCX gold slipped about 2% to ₹1,49,396 per 10 grams. The selloff was not confined to domestic markets. On COMEX, silver prices tumbled over 9% to $63.900, and gold futures were down roughly 3% at around $4,670.
Broader Market Turmoil and Contributing Factors
Adding to the market turmoil, Bitcoin, the world's largest cryptocurrency, plunged below $65,000, reaching its lowest level in more than a year amid intense selling pressure and extreme risk aversion. The digital token, which had surged to a record high of $126,000 in October 2025, has been in a sharp and sustained decline since then, reflecting a broad shift in investor sentiment away from high-risk assets.
A combination of macroeconomic and geopolitical factors is weighing heavily on bullion. The U.S. dollar hovered near a two-week high and was headed for its strongest weekly performance since November, making dollar-denominated commodities less attractive. The greenback found support as investors reassessed expectations following President Donald Trump's nomination of Kevin Warsh as the next Federal Reserve Chair. Markets interpreted this move as signaling a more hawkish policy stance, with slower US rate cuts and a smaller Fed balance sheet.
Simultaneously, bullion's safe-haven appeal weakened as geopolitical tensions showed signs of easing. Iran and the US agreed to hold talks in Oman, while a phone call between US President Donald Trump and Chinese President Xi Jinping helped calm fears of escalating trade and security tensions. With diplomatic signals turning constructive, demand for traditional safe-haven assets softened further.
Veliyath's Investment Philosophy Reinforced
Porinju Veliyath, Founder & CEO of Equity Intelligence India, is widely regarded for his value-focused approach and his ability to identify multibagger stocks. He has long argued that true wealth creation lies in fundamentally strong businesses rather than in assets driven primarily by sentiment. The recent correction in gold and silver appears to have reinforced his long-held stance, providing a timely reminder of his investment principles.
Disclaimer: The views and recommendations expressed above are those of individual analysts or broking companies, and not of Mint. Investors are advised to consult with certified experts before making any investment decisions.
