Moneycontrol FiDEX 2026: Precious metals deserve strategic allocation, but investors must avoid FOMO, experts say

• Gold and silver viewed as strategic diversifiers, not just safe havens
• Investor FOMO and central banks boost precious metals demand
• Experts suggest 8–10 percent allocation for portfolio balance

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Rising geopolitical tensions, central bank buying and investor FOMO are reshaping the conversation around precious metals, with experts arguing that gold and silver should be viewed as strategic portfolio diversifiers rather than just tactical safe-haven trades.

Speaking at Moneycontrol FiDEX 2026, industry experts said the recent surge in investor interest has been driven as much by behavioural biases as by macroeconomic factors.

Vandana Trivedi, Head – Institutional Sales & Passives at Axis AMC, said investor demand for gold has been amplified by several overlapping trends. “There is a recency bias because gold has performed well, a FOMO element as investors chase the rally, and also a narrative bias around central banks buying gold and rising geopolitical tensions,” she said. The availability of gold ETFs has also made it easier for Indian investors, traditionally heavy holders of physical gold, to gain exposure in a more liquid format.

However, she noted that while narratives around geopolitical uncertainty and central bank purchases are not entirely misplaced, investor behaviour is playing a large role in the current enthusiasm for precious metals.

Anil Ghelani, Head – Passive Investments & Products at DSP Mutual Fund, said persistent geopolitical tensions since the Russia-Ukraine conflict have strengthened gold’s role as a safe-haven asset. “Whenever there is uncertainty, we tend to see a flight to safety,” he said, adding that the current environment of wars and trade tensions has reinforced demand for gold.

At the same time, he cautioned that investors should not assume that gold will always hold up during periods of market stress, as investors often book profits across asset classes during extreme volatility.

Amit Vashisht, Head of Passives at UTI Mutual Fund, pointed out that valuing commodities like gold and silver is inherently different from equities. “In equities we can talk about valuation metrics like price-to-earnings ratios, but commodities are driven by multiple factors including geopolitics, currency movements and demand-supply dynamics,” he said.

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

Kaustubh Belapurkar, Director of Fund Research at Morningstar India, said the surge in inflows into gold ETFs reflects investors chasing past returns. “When investors see strong performance, the tendency is to extrapolate that into the future,” he said, noting that large inflows into gold ETFs this year highlight the growing investor interest.

Despite the enthusiasm, the panel broadly agreed that precious metals should remain a modest part of portfolios. Most speakers suggested an allocation of around 8–10% as part of a diversified investment strategy.

Experts emphasised that while gold and silver can play an important role in portfolio diversification, they should complement — rather than dominate, a balanced asset allocation framework.