Mumbai: Gold should be embraced as a portfolio diversifier and hedging strategy by an investor in the current environment. The present difficult time amid pandemic COVID-19 will continue to reinforce the role of gold as a strategic asset, said eminent experts in a Webinar on Gold Investment Opportunity and Price Outlook organised by PHD Chamber of Commerce and Industry.
Eminent experts at the webinar were of the view that gold will have good run in the coming times as demand will emerge and it should be seen as a part of portfolio diversifier by an investor at this juncture.
PHD Chamber of Commerce and Industry organised a Webinar on Gold Investment Opportunity and Price Outlook by Globally Renowned Experts on 22nd July 2020.
Mr. Somasundaram PR , Managing Director, India, World Gold Council (WGC) said that gold should be looked as portfolio diversifier. He added that gold is absolutely going to have good run in the coming times as demand will come back. He stated that demand for gold should not be remained low in the future, therefore industry should take certain measures to address the fall in demand for gold. He also added that Government must provide some relief measures such as exemption of capital gains tax to provide impetus to gold market in the coming times.
Dr. D. K. Aggarwal, President, PHD Chamber, said that the gold prices have significantly increased and crossed the level of Rs 50,000. He stated that reasons of this high gold prices can be majorly attributed to COVID-19 situation. He mentioned that the world is seeing a huge surge in COVID-19 cases and there is uncertainty regarding vaccine in the world, which is causing the concerns regarding the global growth. He said that the monetary loosening will continue in coming times and will drive the gold prices. He stated that it is not only the USD yield, which is going down, but the real yield is also declining and causing increase in the gold prices. He mentioned that people are increasingly investing in gold as it is a save heaven for parking the investments in times of adversities, gold provides a hedge against currency fluctuations and gold diversify & stabilises investment portfolio in times of adversity.
Mr. Pradeep Multani, Vice President, PHD Chamber, presented the formal vote of thanks. He appreciated and thanked all the speakers for addressing the webinar, sharing insights on outlook of gold prices and making the session successful. While being optimistic about the gold prices, he said that the gold has always been attractive for investment purpose and for emotional buying and this trend will continue in the coming times as well.
Mr. Philip Newman, Director and Founder, Metals Focus, said that the gold prices are expected to remain high in the coming times. He stated that, while in some markets/countries people are holding on to their gold amid high price expectations, people in other markets/countries have been selling gold. He mentioned that the central banks around the world are not expected to follow tightening monetary policy anytime soon. He opined that there is still room for gold prices to grow further this year and the next year. He said that the gold prices are expected to increase over 1700 US$/oz in the current year and to over 1800 US$/oz in the following year.
Mr. Shivanshu Mehta, Head – Bullion, MCX added that in the present time of negative interest rate environment, geopolitical risks, currency fluctuations, will drive demand for gold in the coming times. He added that there is a need to understand physical and retail side of industry. He shared about different products offered by MCX in bullion market for investors such as silver 1 kg contract, gold coin, gold petal, among others. He added that retail consumers are looking for more organised ways of investments and hence, MCX is reforming from time to time to meet the aspirations of investors.
Mr. Harish Purushottam Pawani, Director, Purshottam Kanji & Co. stated that there is huge demand for ETFs but little demand for jewellery at present time. Recently due to pandemic COVID-19 there is huge demand destruction, job loss, lot of salaries have been reduced which has led to fall in demand for gold particularly in UAE. Although investment in gold ETFs is there in the market. Going ahead, when environment becomes stable, demand for gold will pick up especially in the festive seasons.
Mr. Sunil Kashyap, Bank of Nova Scotia, Managing Director, Asia Pacific, Metals stated that gold should be seen as a diversifier in portfolio. It is the only overseas asset linked to USD, hedges against currency devaluation and equity market. He added that 60% of the Government bonds in world are giving negative return, therefore, people are valuing and taking gold very seriously. He also shared that Governments across the world are pumping money in the economy, which is flowing in markets, bonds, gold market, among others.
Mr. Jeremy East, CEO, East Wind Capital, Ex Global Metals at Head of Standard Chartered Bank talked about importance of physical markets and stated that markets of different countries over the years have become more and more efficient. He added that some markets are trading gold at higher premium and some at big discounts. He also threw light on London market which is performing well, while added that china is importing thousand tonnes of gold over last 5-7 years. He opined that people across countries save gold for rainy days and in future gold is a right thing to hold as it has justified its value over the years.
Mr. Pradeep Garg, Chairman, Gold, Gems and Jewellery Committee, PHD Chamber, said that the webinar includes world’s best experts to share their insights in the gold price outlook. He discussed about the impact of COVID-19 on the businesses and stated that at this crucial time, investors are looking for risk free and safe assets for making investments. He said that in Indian context, gold has remained important from the point of view of individual finance as well as from emotional quotient. He mentioned that India is the second largest consumer of gold. He opined that in the changing global environment, it will be a wise decision to invest in gold, given its stable returns, easy liquidation, among others.
Mr. Mayank Khemka, Co-Chairman, Gold, Gems and Jewellery Committee, PHD Chamber, said that while world look at the gold from investment perspective, however, India has a special affection for gold as it is not just about value, but also about display and pride of possession. He mentioned that in 2012, the World Gold Council stated that India held 20,000 tonnes of gold, while other estimates says that there are between 18,000 and 25,000 tonnes of gold accumulated within India. He said that with the COVID-19 disruption, the explicit investment motive seems to have gained ground in India, but perhaps a small beginning of a mega trend of investment gold taking its due place in Indian markets. He opined that the investment demand of gold may see a revival due to price rise, availability of pure forms of gold bar and coins, digitalisation of the economy, among others.
