Gold seems to have found its mojo hitting back-to-back lifetime highs this week. While we know that the hope of interest rates has given an impetus, will you see it lasting till June which is expected to be the time of first rate cut?
Jigar Pandit: Although the recent data from the US economy looked weak, this could be passed as a one-off case and we have to look forward to key measures of CPI, PCE NFP and retail sales of upcoming months to get a confirmation of a June rate cut or else Gold may lose its glitter in coming months.
What is the target of gold in the medium to long term?
Jigar Pandit: We expect gold to face crucial resistance of $2,200 as of now until we get data confirmation of slowdown from the labour market report and CPI data. We remain intact with our Long term target of $2,400 for 2024.
Will investors be able to still make most of it if they enter at current levels or should one wait for a deeper correction?
Jigar Pandit: As of now gold looks technically overbought, we advise investors to wait for correction, $2,100 and $2,088 is a good level to enter for higher targets.
Is it time to get bullish on silver considering that on a YTD basis, it is still significantly behind its peak?
Jigar Pandit: We expect silver to perform sluggish in H1-2024 as Industrial demand from China has been very weak since returning from Lunar Holiday, and the recent manufacturing and services PMI data are also not encouraging to infuse investors confidence into the metal
Industrial demand is a strong trigger for silver prices and how is that shaping up?
Jigar Pandit: The slowdown in the Chinese market has an overall impact on the industrial metals thus we are seeing very sluggish moves in silver, while silver market remained in deficit in 2023 and expected to follow up with deficit in 2024 as well due to mining concerns in Latin American mines. So once we see some greenshoots of economic growth from China, silver will outperform gold.What will be the target for Silver and trading strategy?
Jigar Pandit: In Short term silver will follow gold, but overall we have to look for a sustainable copper rally, which would be indicative of strong industrial demand and that could drive silver to our long term target of $30.It is not often that you see equities, bullion and cryptocurrencies, all doing well at the same time. Do you estimate some hit in gold if other asset classes continue doing well?
Jigar Pandit: Gold has often done well in the low interest rates regime due to the liquidity, but we expect gold to underperform on relative basis to other asset classes
While there are multiple ways to invest in gold, which one will you advocate and how much allocation one must make towards gold and silver?
Jigar Pandit: For long term investors with a view of holding in electronic form, SGB’s is the best for investing in Gold assets as it pays interest as well as it has tax benefits also.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
