"ICICI’s S Naren Warns: Why Buying Gold Now May Be a Costly Mistake"
"ICICI Prudential" AMC’s CIO S Naren advises investors to avoid rushing into gold investments. Discover why he believes premature gold buying often ends in disaster and what smart investors should do instead."
“Don’t Buy Gold Yet”: ICICI’s S Naren Warns Against Investor Rush
Gold has always held a special place in the hearts and portfolios of Indian investors.
“ICICI’s S Naren Warns:
Considered a safe haven, generations have trusted yellow metal to protect wealth during uncertain times.
However, financial markets are changing rapidly, and even long-standing assumptions about gold are being challenged. Recently, S Naren, Chief Investment Officer (CIO) of ICICI Prudential AMC, cautioned investors against rushing into gold right now.
According to him, buying gold in panic or under emotional bias often ends in disaster.
So why is one of India’s most respected fund managers advising restraint? Let’s break down his reasoning and see what it means for Indian investors eyeing gold in 2025.
Gold – The Emotional Asset for Indians
In India, gold is not just an asset; it is an emotion tied to festivals, weddings, and family wealth creation.
Over decades, gold has served as both an ornamental possession and a store of value.
Many investors assume that buying gold is always safe. But like any other investment class, the timing of entry and the risk-reward ratio matter significantly.
S Naren emphasizes that blindly chasing gold whenever there is fear in the market or whenever prices rise sharply can harm investors’ long-term returns.
Buying based on herd mentality often locks investors into high purchase prices, eroding wealth instead of protecting it.
Why Naren Says ‘Don’t Buy Gold Yet’
According to S Naren, there are critical reasons why buying gold impulsively might backfire in the current market scenario:
Global Uncertainty Creates Overreaction: In times of economic slowdown, inflation or geopolitical tension, investors often flock to gold. But this knee-jerk reaction leads to overvaluation. Entering at peak prices limits future gains.
Opportunity Cost of Holding Gold: Gold does not generate dividends, interest, or rental income.
By allocating too much capital into gold at the wrong time, investors may miss out on equities, bonds, or fixed-income opportunities that yield better returns.
Cycle Awareness: Historically, gold’s best performance comes when inflation and currency weakness worsen.
At present, global economies, especially the US and India, are stabilizing in many respects, which reduces the immediate upside potential of gold.
Investor Psychology Trap: When average investors buy gold on panic, they assume protection. But markets don’t reward late entrants.
Those who buy at fear-driven highs may face years of stagnation in returns.
Historical Lessons: Gold Bubbles and Investor Mistakes
History is full of examples when investors piled into gold with overconfidence, only to regret later. For instance:
In the 1980s, gold touched historic highs during global crises. But many who rushed in at the peak had to wait nearly two decades to break even.
In 2011-2012, amidst the European debt crisis, gold crossed $1,900 per ounce.
Investors rushed in, expecting a straight rise. Instead, prices corrected sharply, and it took almost a decade for sustained upside.
Even in India, sharp price surges before Diwali or wedding seasons often trap retail buyers into purchasing near short-term tops.
These lessons highlight why S Naren’s current warning should not be ignored.
What Should Investors Do Instead?
While S Naren is sounding alarm bells against premature gold buying, he is not asking investors to abandon the metal completely.
His advice points toward discipline, timing, and allocation strategy:
Treat Gold as Diversification, Not the Core: Financial planners recommend 5–10% of total portfolio in gold, mainly for hedging. Investors must avoid over-allocation.
Wait for Correction or Favorable Cycles: Instead of buying during excitement, patient investors should look for stable prices or corrections.
Systematic Approach via SIPs in Gold ETFs: Rather than lump-sum emotional buying, systematic investment in gold exchange-traded funds ensures balanced cost-averaging.
Balance with Equity and Debt: Naren is a known proponent of contrarian investing. He believes wealth is created when investors allocate more toward undervalued asset classes, such as equities during pessimism,
instead of blindly chasing shiny assets.
ICICI Prudential’s Broader Investment Philosophy
At ICICI Prudential AMC, S Naren has consistently advocated for asset allocation and disciplined investing.
His philosophy rests on not being swayed by market noise but instead balancing risk across asset classes like equities, debt, and gold.
For him, sustainable wealth creation lies in patience, contrarian bets, and smart diversification.
For retail investors, this lesson is clear: do not follow the herd blindly into gold just because the world appears uncertain.
Instead, evaluate whether adding gold fits well within your larger financial plan.
Key Takeaways for Indian Investors
Gold is valuable, but emotional buying leads to mistakes.
Current global and domestic economic indicators do not justify a blind rush into gold.
Panic buying at peaks often reduces long-term returns.
Diversification, allocation control, and discipline should guide gold investments.
Investors should instead keep an eye on undervalued opportunities in equities and debt markets.
Final Thoughts
S Naren’s warning, “Don’t buy gold yet,” is not meant to demonize the yellow metal.
Instead, it is a reminder that timing, asset allocation, and rationale matter more than tradition or fear.
For Indian investors seeking financial security, gold will always remain a part of the picture, but its entry point is critical.