Marcellus Investment Managers founder Saurabh Mukherjea has suggested waiting to buy precious metals amid continued volatility in gold and silver prices. The well-known investor told Raj Shamani during a recent podcast episode that he wished to make precious metals a major part of his portfolio but did not see the logic at current valuations.
The Marcellus founder also put forward a “controversial” take on the matter — suggesting that investors could “wait for the fear to abate” before going forward with gold.
‘Wait for some time’
“There are two ways to diversify. You diversify from a cheap asset to an expensive asset. Or you can sell an expensive asset and buy a cheap asset. That’s the logic we followed when we diversified out of Indian mid-caps into American and European mid-caps. They were cheap…it was expensive here. So sell here and buy there. But by that logic, buying gold does not seem such a clever idea at this time. I think we should wait for a while before buying gold,” he opined.
Mukherjea added that he would like to have precious metals (such as gold, silver and perhaps platinum) as one third of his portfolio. But he noted that it was likely not a good idea at current valuations.
“So I’m investing half of my money in Indian and American equities. And I’m waiting to see when these pressures will come down…I don’t know when it will improve,” he added.
Why is this happening?
Gold has shown notable price swings in recent months amid broader market and geopolitical pressures. The yellow metal hit a record high of $4,441.92 in late December — even as silver set its own record of $69.44 per ounce and platinum hit a more than 17-year high.
“There’s so much turmoil going on. The people who run the central banks around the world…the people who invest the official deposits of a country…even they are realising that there’s a major upheaval underway. And so they’re taking the sovereign wealth and buying gold with that. And that is jacking up the price of gold,” Mukherjea explained.
The Marcellus founder opined that those leading the gold investment race might also be “overreacting to the tariff drama” stemming from US policies under Donald Trump. He suggested that the fixation on tariffs was gradually fading out (with India and Brazil as exceptions) as the US Fed announced rate cuts.
“This is a fear trade, which is why major central banks have bought gold in droves. Perhaps, the worst of the fear trade, which has ramped up gold, is behind us and if that’s the case, hopefully, gold is coming down. And that’s why I’m calling it controversial because today it seems like the fear trade will continue. So I’m waiting for gold to come down, at which point I’ll put one-third of my wealth in precious metals of various sorts,” he added.