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.
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