Manish Banthia, the Chief Investment Officer for Fixed Income at ICICI Prudential AMC, is urging investors to halt new investments in gold and silver. Banthia, known for his accurate market calls, believes that bullion has become the least attractive asset class compared to equities and debt, which now offer superior risk-reward profiles.
Past Predictions and Current Stance
Banthia, who oversees debt assets valued at approximately ₹2.7 lakh crore, made a prescient call in November 2023, turning bullish on gold when market sentiment was weak and prices had shown little growth over the preceding decade. Investors who followed his advice were significantly rewarded. He also accurately flagged a peak in silver prices for late 2025. However, the situation has now reversed.
According to Banthia, gold currently stands as the least appealing option among equity, debt, and bullion. He strongly advises against allocating incremental capital to the yellow metal at its current valuations.
Why Gold's Appeal Has Faded
The factors that made gold an attractive investment in 2023 have largely dissipated. Back then, valuations were reasonable, and investor interest was subdued despite supportive macroeconomic trends like rising inflation, substantial central bank purchases post-Russia-Ukraine conflict, and growing concerns over de-dollarisation. However, significant gains throughout 2024 and 2025 have dramatically altered this landscape.
"While the underlying narrative remained unchanged, valuations expanded rapidly, and sentiment became overly optimistic," Banthia stated, explaining the shift.
He noted that India contributed roughly 5% of the incremental global silver demand during this period, with much of the buying driven by ETF investments rather than industrial demand. Such speculative flows, he argues, inflated prices and transformed precious metals into a crowded trade. Furthermore, central bank demand for gold has moderated, with some institutions booking profits after the strong rally, and the metal's share in reserve portfolios has increased, reducing the need for further diversification.
Looking Ahead: Equities and Debt Preferred
While Banthia remains positive on long-term structural themes like de-dollarisation, rising US debt, and changes in the global monetary order, he cautions that these trends do not justify buying gold at current prices. He believes current gold prices already reflect a significant portion of that narrative.
For the medium term (three to five years), Banthia's outlook favors equities over gold. He asserts that gold, which was undervalued in 2022-23, now appears expensive relative to stocks and is unlikely to outperform them. He emphasizes that a good asset isn't always a good investment, irrespective of its price.
For investors deploying fresh capital, Banthia recommends a balanced allocation between equities and debt. Debt, he notes, offers attractive yields, while equities provide robust long-term growth opportunities. Within equities, emerging markets are particularly appealing, with India topping his list for domestic investors due to moderated valuations after appearing stretched in 2024. China also presents an attractive opportunity, though AI-driven markets like Taiwan and South Korea seem relatively expensive.
With foreign investor sentiment towards India turning cautious, Banthia sees the country as an increasingly contrarian opportunity rather than a crowded consensus trade.