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Kolkata: Gold and silver have blazed the returns table in 2025. The question is, whether the precious metals will continue to behave the same way in 2026, and perhaps, more important, how can one hope to take exposure in these assets now. TV9 speaks to Chintan Haria, principal investment strategist of ICICI Prudential Asset Management Company to take ideas for our readers.
Haria cautions that following the strong run up in gold and silver prices over the past few years, investors should adopt a cautious approach rather than making large lumpsum allocations. The expert is in favour of investors adopting a disciplined investment strategy instead of chasing returns.
Q: Gold and Silver are trading at their record highs, what are various reasons for this rally? Can we expect to see such a rally in 2026?
A: A confluence of factors has resulted in the rally of precious commodities in recent times. Geopolitical tensions, trade related uncertainty, continued expectations of interest rate cuts in the US have weakened the dollar, strengthening gold’s appeal as a safe-haven asset. Heavy inflows into gold ETFs ($77 billion YTD November 2025 according to the World gold Council) with total assets under management reaching $530 billion is another factor. In addition, continued gold accumulation by central banks has provided structural support to prices. In India, there is also heavy demand in the physical forms of jewellery and bars/coins. With the possibility of a quantitative easing program restarting, the argument for gold as safe haven gets stronger.
Silver has witnessed a stronger rally than even gold. In addition to its role as a safe haven, it also has strong industrial demand. Persistent demand – supply mismatch has further accelerated the rally. Since 2021, global silver supply has lagged behind demand. The global silver market is expected to see another year of supply deficit, with tightening availability and export restrictions likely to deepen the shortfall. This supply side pressure is expected to keep sentiment positive for silver in the near term.
Q: What should be the ideal way to take an exposure to Gold and Silver now? Should one look a SIP or lumpsum investment in current times? ETF doesn’t allow SIP, so what should be the alternative to it?
A: Gold and silver can be useful portfolio diversifiers. A 10–15% allocation is generally adequate, depending on investor risk appetite, investment horizon and financial goals. However, given the sharp rally seen in gold and silver prices, investors should be cautious of a price correction. To manage this risk, retail investors can opt for a staggered investment approach. They can allocate a portion of their portfolio to gold/silver ETFs or FOFs. ETFs offer a convenient way to own gold in demat form, making it possible to invest in small and affordable quantities. Investing in gold/silver FOFs through SIPs can help average out costs and reduce timing risks.
Q: Are investors looking at precious metals as hedge against rupee weakness? What are the limitations with other alternatives available for overseas investments?
A: Though fundamentally these precious metals are expected to work as inflation hedges, they act as a hedge against rupee weakness against the dollar.
With other alternatives for overseas investments, adverse cross-currency movements, challenges in overseas remittances and compliance aspects, difficulties in assessing the suitable investment avenue or even the country to invest in are key factors of concern. Further, in the case of overseas stocks or ETFs, analysing the fundamental factors and choosing the best avenues may be difficult for retail investors. They may risk going with the herd mentality of poplar names/themes that may have already run too much.
Q: Can we say that because of the absence of overseas investments alternatives to diversify from Rupee denominated assets, investors are opting for Gold and Silver ETFs?
A: Partly because of the challenges – time, resources and expertise required – surrounding alternatives to diversifying from rupee assets, investors may seek options that are easier to understand.
Given that both gold and silver are both inflation and currency hedges, apart from being portfolio diversifiers, there is investor preference for these metals.
Gold and silver ETFs have also become popular and preferred mode of investing for Indians also because they allow small investments (a few hundred rupees) at low costs with reasonably healthy liquidity in the exchanges. They are simple to understand as well. A domestic demat would suffice for buying gold and silver ETFs.
(Disclaimer: This article is only meant to provide information. TV9 does not recommend buying or selling shares or subscriptions of any IPO, Mutual Funds, precious metals, commodity, REITs, InvITs and any form of alternative investment instruments and crypto assets.)
