Gold has emerged as the most talked-about asset class in recent times, attracting immense investor interest globally. However, S Naren, Chief Investment Officer at ICICI Prudential AMC, has sounded a cautionary note on the yellow metal, stating that despite its current popularity, gold is not a lucrative investment option at this point.
In a recent interaction with ETNow, Naren pointed out that the surge in questions about gold during investor meetings reflects the heightened focus on the asset, but he maintained that its value proposition is questionable, especially given its current price levels. “Gold is even worse,” he asserted, emphasizing that the metal is no longer as attractive as it was two years ago.
Despite its widespread popularity, he indicated that the precious metal is not an attractive investment option currently, particularly when compared to its more favorable outlook two years ago.
“Two years back, for example, gold and silver were very-very interesting, so we actually thought it was very-very interesting, now even that does not look at this point of time,” he said.
Discussing gold’s meteoric rise, Naren remarked, “The asset class which is most in vogue right now is gold. If you go for any meeting, the number of questions we get on gold is unbelievable at this point of time.”
On the debt market front, Naren observed that in India, the 10-year government securities are currently at some of the lowest interest rates seen in recent years, contrasting sharply with the Western markets where 10-year yields are at multi-year highs.
“Across the world, you are at the highest yields in 10-year, except in China and India,” he noted, pointing to the relative lack of value in Indian debt instruments.
Also read: Gold Price Prediction: Yellow metal gets cheaper by Rs 3,750/10 gm this week. More fall ahead?
What should investors do?
The veteran investor suggested a diversified investment approach, advising that it is not the time to focus on a single asset class but rather to allocate capital across multiple assets while maintaining a conservative stance.
“It is a time where you allocate money across asset classes and not choose one asset class and at the same time today focus within every asset class on the safer parts of the asset class because of the way the markets are at this point of time,” he recommended.
Despite the challenges in asset allocation, Naren remains optimistic about India’s macroeconomic stability, highlighting that the country continues to be one of the best structural stories globally, having managed its macro fundamentals effectively over the past decade.
( Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
In a recent interaction with ETNow, Naren pointed out that the surge in questions about gold during investor meetings reflects the heightened focus on the asset, but he maintained that its value proposition is questionable, especially given its current price levels. “Gold is even worse,” he asserted, emphasizing that the metal is no longer as attractive as it was two years ago.
Despite its widespread popularity, he indicated that the precious metal is not an attractive investment option currently, particularly when compared to its more favorable outlook two years ago.
“Two years back, for example, gold and silver were very-very interesting, so we actually thought it was very-very interesting, now even that does not look at this point of time,” he said.
Discussing gold’s meteoric rise, Naren remarked, “The asset class which is most in vogue right now is gold. If you go for any meeting, the number of questions we get on gold is unbelievable at this point of time.”
On the debt market front, Naren observed that in India, the 10-year government securities are currently at some of the lowest interest rates seen in recent years, contrasting sharply with the Western markets where 10-year yields are at multi-year highs.
“Across the world, you are at the highest yields in 10-year, except in China and India,” he noted, pointing to the relative lack of value in Indian debt instruments.
Also read: Gold Price Prediction: Yellow metal gets cheaper by Rs 3,750/10 gm this week. More fall ahead?
What should investors do?
The veteran investor suggested a diversified investment approach, advising that it is not the time to focus on a single asset class but rather to allocate capital across multiple assets while maintaining a conservative stance.
“It is a time where you allocate money across asset classes and not choose one asset class and at the same time today focus within every asset class on the safer parts of the asset class because of the way the markets are at this point of time,” he recommended.
Despite the challenges in asset allocation, Naren remains optimistic about India’s macroeconomic stability, highlighting that the country continues to be one of the best structural stories globally, having managed its macro fundamentals effectively over the past decade.
( Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
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