Over the next six months, returns from gold and silver could beat those from equities, according to Goldilocks Premium Research's Gautam Shah.
There will be pockets in the equity markets that will stand out, but significant changes are not expected, the founder and chief strategist of Goldilocks, told BQ Prime's Niraj Shah. “Keeping that in mind, gold and silver are asset classes that you cannot ignore over the next three-six months."
Given the geopolitical risks seen currently, it is important to keep a tab on gold and silver, Shah said. “Every time there has been a dip in gold towards $1,800, it has been a wonderful buying opportunity.”
Amid geopolitical tensions, there will finally be a breakout on the upside past $2,070, and the bigger target stays quite high at $2,300–$2,400, Shah said.
Along with gold and silver, bitcoin and crude will also be on the uptrend, according to him.
Downtrend In Equities To Continue
According to Shah, the downtrend that the equity market has seen will continue for many more weeks.
"We have been maintaining a cautious stance on equities as the market topped out for the medium term at 20,200, and there is too much of a headwind that India and the world is dealing with," he said.
Too many levels on the upside are acting as ceilings, while the 19,200-19,400 levels are very important resistants, he said.
“The only positive that I see is the domestic liquidity. The Rs 16,000 crore coming into the system every month will protect the market from collapse or a deeper fall.”
While the mid-cap and small-cap stocks will definitely be under pressure, the underperformance in the banking stocks will continue to see a downward trend, Shah said.
According to him, the manufacturing, real estate, and infrastructure story is here to stay. “People who can play the structural story should stay invested in themes like auto ancillary, infrastructure, real estate, manufacturing, and real estate proxy stocks as they will do exceedingly well.”
Watch the full conversation here:
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