Strategic Allocation Advised for Precious Metals, Caution Urged Against FOMO at Moneycontrol FiDEX 2026

Precious Metals Revaluation: Experts Advocate Strategic Portfolio Diversification

Rising Geopolitical Tensions and Central Bank Buying Drive Precious Metals Demand

Gold and silver are being reevaluated as strategic portfolio diversifiers rather than just tactical safe-haven trades, driven by rising geopolitical tensions, central bank buying, and investor FOMO. Industry experts at Moneycontrol FiDEX 2026 argued that investor demand is amplified by behavioral biases, including recency bias, FOMO, and narrative bias.

Behavioral Biases Drive Investor Demand

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Vandana Trivedi, Head – Institutional Sales & Passives at Axis AMC, noted that investor demand for gold has been fueled by several overlapping trends, including recency bias, FOMO, and narrative bias around central banks buying gold and rising geopolitical tensions. The availability of gold ETFs has made it easier for Indian investors to gain exposure in a more liquid format.

Geopolitical Uncertainty and Central Bank Purchases Reinforce Safe-Haven Demand

Anil Ghelani, Head – Passive Investments & Products at DSP Mutual Fund, stated that persistent geopolitical tensions since the Russia-Ukraine conflict have strengthened gold's role as a safe-haven asset. However, he cautioned that investors should not assume that gold will always hold up during periods of market stress.

Valuing Commodities vs. Equities

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Amit Vashisht, Head of Passives at UTI Mutual Fund, emphasized that valuing commodities like gold and silver is inherently different from equities, driven by multiple factors including geopolitics, currency movements, and demand-supply dynamics.

Silver's Industrial Demand and Volatility

Silver is increasingly influenced by industrial demand, which has risen significantly over the past decade. Vashisht warned that precious metals can remain stagnant for long periods and are often more volatile than investors assume.

Precious Metals Should Remain a Modest Part of Portfolios

Experts agreed that gold and silver should remain a modest part of portfolios, allocating around 8-10% as part of a diversified investment strategy. They emphasized that precious metals should complement, rather than dominate, a balanced asset allocation framework.