- Gold's bull market remains intact due to central bank purchases, geopolitical uncertainty, Chokhani said
- Gold prices have surged above $4,000 globally, prompting caution for immediate investment
- Gold has risen over 60% this year, reaching a record Rs 1,22,169 per 10 grams in India
The bull market in gold is structurally intact driven by aggressive central bank purchases and rising geopolitical uncertainty, according to Manish Chokhani, Director of Enam Holdings Ltd.
Though he cautions investors against chasing the metal at its current elevated price points, Chokhani's outlook suggests that the long-term drivers are robust. While he suggests that gold is due for a consolidation phase, the precious metal's role as a safe haven is stronger than ever.
Chokhani advised immediate caution, stating he would “not recommend gold now." This stems from the fact that the yellow metal is now trading above the $4,000 levels globally. The expert calls this a temporary peak or prices before the prices start to consolidate. Despite this, he confirmed the long-term bullish view.
“Gold will consolidate but central banks are buying gold and silver like there's no tomorrow,” Chokani noted. This fervent buying by central banks which are diversifying reserves away from currencies, and into these precious metals have pushed the prices into a record run. Gold used to be the standard, he noted emphasising the strategic and historical importance of the metal given the current geo-political landscape.
The expert highlighted that these surges in the prices are playing into the currency. "People over 50 are buying gold while people below 50 are buying bitcoins," he illustrated.
Weighing in, market veteran, Ramesh Damani said that he prefers equity. Noting that gold has only returned 3% in the long term, he remains bullish on the growth story of the Indian equity markets.
Renewed concerns on the global level about geo-political tensions have amplified safe-haven demand, while increased bets on a potential interest rate cut in the US have further supported prices.
Gold has already soared more than 50% this year, hitting a fresh record of Rs 1,22,169 per 10 grams on Thursday, marking an extraordinary 60.10% increase so far this year. Further, the Fed's rate cuts spurred investors to pile into gold-backed exchange-traded funds, which saw their strongest monthly inflows on record in September. .
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