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Chirag Thakkar of Amrapali Gujarat expects gold and silver to track crude oil in the short term. He sees crude falling to $85-90 per barrel and more buying on dips. He also spoke about talk of an import duty cut, festival demand after Shradh, and growth in digital gold and ETFs.
Chirag Thakkar, co-founder of Amrapali Gujarat, expects gold and silver prices to stay linked to crude oil in the short term. He anticipates crude falling to $85-90 per barrel, which he says would bring more buying on dips in both metals. He also expects the two metals to move together over the next six months.
A dip in prices, he said, would be a buying opportunity for both. Crude has fallen to $94-95 per barrel from $102-104 per barrel last week. Thakkar said the US Federal Reserve's rate decision was already priced in, so it did not move gold and silver much.
Crude is now the main driver. Import duty Higher import duty in India has pushed some buyers to compare prices with Dubai. Thakkar said he has heard talk on the street that the government could rationalise the duty on gold and silver, given crude prices and the currency.
He said this is unconfirmed. He linked the talk to India's dollar reserves, which he said have reached a milestone in the last couple of months. "Those rumours could get relative strength down the line," he said, if crude stays at a maintainable level for the next six to seven months.
Festival demand Buying of gold and silver jewellery has grown month on month, Thakkar said. The most auspicious buying period, when Indian retail consumers traditionally buy precious metals, begins after Shradh, which starts in the next 15-20 days. Shradh is a period of ancestral rites, and many families delay purchases until it ends.
He expects demand this quarter to fall short of last year's level. Matching last year's demand would be a milestone for the whole value chain, he said. Digital gold and ETFs Digital gold and silver platforms are growing at about 15% month on month, Thakkar said.
Investors who do not want physical metal at exit are moving to exchange-traded funds (ETFs), which are funds that track the metal's price. Those who want to redeem their digital wallets for physical coins, bars or jewellery are using the platforms, which make it easier to buy in small amounts. Silver as décor Thakkar said silver demand comes from investment, jewellery and artefacts such as idols kept at home.
He described this as indirect investment, because buyers also use the pieces to decorate their homes. Gold idols cannot be displayed the same way, he said. He expects artefacts to take a larger share of silver demand over the next one to two years.
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Source: CNBC TV18
