Market experts talk about gold jewellery demand, sovereign gold bonds and the upcoming wedding season to boost gold prices even further. We discuss on how the younger generation is investing in gold ETFs rather than jewellery and much more. Click here to know more: https://www.goodreturns.in/
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~ED.148~GR.124~PR.147~
#goldinvestment #investing #finance
~ED.148~GR.124~PR.147~
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NewsTranscript
00:00 Hello and welcome to All That Glitters, a brand new show on the most talked about metal
00:06 in the financial world.
00:07 Gold.
00:08 We have all heard the story about how India had huge wealth pre-independence and how wealthy
00:15 were you was measured by how much gold you own.
00:18 Well, time has passed.
00:20 We are in the 21st century now and the perspective of wealth has changed.
00:25 What has not changed is the value of gold.
00:29 Why the yellow metal is called as the safe heaven asset.
00:32 Even during war and the financial crisis, why the value of gold goes up.
00:38 What is interesting is while the Indian stock market is hitting record highs in the past
00:43 few months, even gold prices are hitting record highs.
00:47 We are here to talk about this and get overall views from experts on gold prices.
00:54 Jatin Trivedi, VP of Research, LKP Securities joins us.
00:59 Hi Jatin, how are you?
01:00 Very good.
01:01 Good evening.
01:02 I'm doing good.
01:03 How are you Shruti?
01:04 I'm doing well.
01:05 Thank you.
01:06 We are talking about gold as an investment, as an asset and why it is called a safe heaven.
01:13 From your perspective, let's say, you know, in the past few months, the stock market has
01:18 hit record highs and so has the gold.
01:21 So what is your overall view on that?
01:24 See, the euphoria totally behind this rally is because of the domestic growth path that
01:31 the Indian markets are showing.
01:33 And secondly, some amount of Middle East crisis that is also supporting gold market.
01:37 And on MCX, we can see the reflection because of the somewhat COMEX, which has, you know,
01:43 performed quite well because of this Middle East crisis and the global uncertainties concerning
01:48 the overall interest rate impact, which is still not being implemented as of now.
01:53 But still, the roadmap looks a little bit clear that the 2024 year is going to be the
01:59 year of global interest rate cut decision making.
02:03 Not only in US, but the overall global markets, whether it be the euro, whether it be the
02:08 Britain or whether it be the Chinese market or Asian markets like our Indian own Indian
02:15 own economy.
02:16 So we will be seeing the aggressive part of the interest rate cuts being implemented most
02:21 probably into the second half of this new calendar year.
02:25 So this is what the euphoria and the main support lies for the gold prices as of now
02:31 on fundamental basis.
02:33 Right.
02:34 So if you had to pick some of the best investment amongst gold, what would they be?
02:39 See, there are a variety of options available into the market where the investment cycle
02:44 rolls in on a typical basis from the investment point of view.
02:48 First and foremost is the lucrative, you know, sovereign gold bond, which, you know, gives
02:54 an additional 2.5% to the investors, even if the market is not moving on the higher
03:00 side or stabilizing at some of the levels of around 60,000 to 62,000.
03:05 But at least they have this buffer of 2.5% against the tide if and all the gold prices,
03:10 you know, starts drifting a little bit lower.
03:13 So they will always have this upper hand to outperform the gold prices as a retail investor.
03:18 And on the other hand, there is a support of rupee as of now that we have seen this
03:22 year that the rupee market has been quite stable.
03:26 The RBI has been very much in line and very aggressive about not letting the rupee fall
03:31 too much.
03:33 So in that terms also, the gold prices have not shown that much of a greater volatility.
03:38 So if and all the rupee was also depreciating a lot, then the gold prices definitely would
03:43 have been rising way much higher as of now.
03:46 But at the same time, some amount of rupee depreciation helps the gold prices in the
03:51 MCX to rise.
03:53 But this year around, we have seen that the rupee market has been very stable.
03:56 But at the same time, we have seen the dollar index also performing and the gold market
04:00 has also been performing this year.
04:02 So all in all, the inflation, higher inflation, what has it has developed is that the market
04:09 participants have been putting the money in varied classes to keep the position hedged
04:14 and keep the varied options open where the market would be finding a good amount of prices.
04:20 Then the prices keep shifting into their investments, whether it be on US dollar or whether it be
04:26 on gold.
04:27 And the other options which are available in the format of gold that are, as I said,
04:32 first is soaring gold one, then we have the ETFs available readily for the retail investors.
04:37 We also have the MCX contracts, which you can convert it into a physical format as well.
04:42 So these are some options which is very much competitive to the prices what the jewelries
04:48 or the jewelers offer.
04:50 Nice.
04:51 Thanks that you spoke about jewelry.
04:52 So this is a known fact that Indians love gold.
04:57 So if we not talk about say investors perspective and just household perspective, do you think
05:06 that gold jewelry demand is decreasing amongst a younger generation?
05:15 Maybe at some point in time, that is correct that the younger generation relies more on
05:19 fashions and the trend of fashion keeps on changing time to time after each and every
05:25 decade we see some amount of new fashion coming around and the jewelry fashion market starts
05:31 to little bit give away some of its glittering impressions because there are readily available
05:39 artificial facts of getting into the fashionable side and more designs are available over there.
05:46 On the gold front, there are some amount of limitations.
05:49 I won't say stronger limitations, but minor limitations are there when it comes to melding
05:53 it and when it comes to making a good amount of fashionable jewelry out of pure gold.
05:59 So artificial jewelry also comes into the picture where the fashion comes into trend,
06:06 but yet again, the younger generation gets attracted towards the ETFs more because they
06:12 understand the power of ETFs.
06:14 They understand the growing strength of keeping the gold on safer basis and also the sovereign
06:20 gold bond that we have seen since last 6 to 7 years, it has given healthy returns also
06:25 and also 2.5% as we discussed earlier that goes into the heads of the younger generation
06:31 that the additional 2.5% is always going to help you because on the compounding basis,
06:36 it gives you a very strong return eventually.
06:39 So yes, I would strongly agree with you that the younger generation keeps on adding towards
06:44 the less interest towards the physical gold that is for sure.
06:49 But since the pandemic that we have seen ending, there have been a lot of wedding ceremonies
06:56 and wedding to be taken place.
06:59 So this year around there is going to be almost 25 to 40 lakh odd numbers of weddings being
07:06 registered.
07:07 So this is also going to impact the gold physical demand I think and because the wedding is
07:13 the main event where the gold purchases goes very relatively higher.
07:19 Even if the prices of the gold are at higher levels, the wedding is one function which
07:23 one does not ignore to buy fresh gold.
07:26 So definitely I think the physical demand in India this year is going to be a little
07:30 bit different.
07:31 The numbers will start reflecting soon because we are into this wedding season as of now
07:36 as we keep on progressing towards February and March.
07:39 So yes, I think this demand will pick up because the prices are stabilized as of now and that
07:45 has always been the picture of physical market whenever the gold prices starts to stabilize
07:51 that is the highest peak time that the physical market starts to develop because retailers
07:58 get attracted towards physical gold when the prices are stable and not trending on the
08:02 higher side because they wait for the prices to stabilize or correct and then they start
08:08 entering it.
08:09 Thank you so much Jatin.
08:10 Let's just keep a watch if the gold keeps glittering or not.
08:14 That was Jatin Trivedi from LKP Securities.
08:16 Thank you so much.