Speaking to ET Now, Haria said gold’s gains—up over 11% in the first few weeks of the year—are being driven by sustained interest from financial investors rather than just physical demand.
Strong flows chasing past performance
Haria pointed out that investor attention has narrowed sharply to gold and silver, supported by heavy fund inflows.
“In December alone, around ₹15,000–16,000 crore flowed into gold and silver. After silver surged nearly 150% and gold over 80% in recent years—making 2025 the best year since 1979–80—it is natural for investors to chase performance,” he said.
However, he cautioned that financial markets are now dominating physical markets, leading to elevated premiums in financial gold products over physical prices.
Strategic case for gold remains intact
From a longer-term perspective, Haria said gold still has room in portfolios.
“There is a clear case for gold revaluation. Trust in the US dollar has weakened due to high debt levels, and gold underperformed for nearly a decade before its recent resurgence. Even today, average investor allocation to gold is only about 5–10%,” he noted.This relatively low allocation, he added, gives gold a long runway as a strategic portfolio diversifier.
Pace of gains may slow
While remaining constructive, Haria urged caution at current levels.
Key supportive factors—such as expectations of US rate cuts, abundant liquidity, and geopolitical uncertainty—are already well known and largely priced in. As a result, further upside may come with higher volatility and a slower pace of gains.
“At these levels, risk management becomes critical. Gold can still move higher, but investors should be prepared for sharper swings,” he said.
Investment takeaway
Haria advised investors to view gold as a strategic allocation rather than a momentum trade, building exposure gradually and keeping portfolio risk in focus amid elevated prices and increased participation from financial investors.