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Economic Times
14-07-2025
- Business
- Economic Times
Sell gold, buy silver? Why poor man's gold is quietly becoming the real treasure
Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads After making tons of money playing the safe haven trade, gold bugs are now shifting to silver in a dramatic bet that the white metal's time has finally come. Silver ETFs have surged around 21% in the last three months, crushing gold ETFs' modest 5% return as speculators abandon the stretched yellow metal for what could be the next mega trend in precious metals - poor man's silver surge hit fever pitch on Monday when MCX silver September futures smashed to a lifetime high of Rs 114,875 per kg. In international markets, spot silver rocketed 3.9% to $38.46 per ounce last week, hitting its highest level since September 2011. The rally was fueled by intensifying safe-haven demand after US President Donald Trump announced sweeping new tariffs, including a 35% duty on Canadian imports and blanket levies of 15% to 20% on most other trade partners starting August 1."Now it's not a question of should you own silver or about how much do you own," said Apurva Sheth, Head of Market Perspectives & Research at SAMCO Securities, highlighting the urgency gripping silver white metal's explosive move comes as gold veterans sound the retreat. Gautam Shah of Goldilocks Premium Research, who rode gold from $1800 to $3500, abandoned his position last month. "Most of the positives were priced in and it has gone into a longish consolidation phase which is going to continue. But over the last few months we have been very-very bullish on silver," Shah confidence in silver's potential is staggering. "If you have to take a 12- to 15-month view, I think $43 I would say is a medium-term target and $50 on silver is probably a slightly more longer-term target," Shah shift reflects more than just profit-taking. Speculators are showing a stronger preference for silver over gold, likely due to the stretched gold-to-silver ratio and the prospect of silver prices catching up to gold's recent gains. Silver also benefits from supportive supply-demand dynamics, with the global market facing its fifth straight year of deficit. Motilal Oswal Financial Services , which had been bullish on gold since Rs 30,000 levels targeting Rs 50,000, called it quits earlier this month. "We've witnessed gains exceeding 30%, and historical data over the past 25 years shows that Comex gold has never achieved more than 32% returns in a single year," the brokerage noted, adding that "some signs of market fatigue are also emerging at these higher levels."The supply threat adds another explosive element to silver's story. "Silver is already in short fall. If US or other nations were to announce similar tariffs on silver or even worse ban exports like China has done in case of rare earth minerals then it could send silver prices to stratospheric levels," warned backdrop couldn't be more supportive of precious metals. The dollar index has dropped close to 10% over the last six months and about 10% since the beginning of this calendar year, according to Emkay Wealth Management. "This has already been priced in the gold prices in the international markets, but what we need to see is a further fall in the dollar caused by official rate cuts and a fall in market yields," the wealth manager highlighted two key factors driving precious metals: the direction of US interest rates and an anticipated decline in the US dollar. "Given the economic conditions and the relatively lower inflation numbers, the likelihood of the Fed going in for a rate cut or two before the end of this calendar year is very high," the firm the new budgeted spending to the tune of $4.60 trillion could complicate matters. "The situation could become murkier because the resultant borrowings may put upward pressure on the yields," Emkay now, silver appears to be the precious metal of choice for those seeking the next big move. As Shah puts it: "If you are booking profits in gold, this might be a good time to top up on silver. Looks like a large mega trend is coming for this commodity."The question for investors is no longer whether to own precious metals, but which one will deliver the bigger payoff in the months ahead.: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
Time of India
14-07-2025
- Business
- Time of India
Sell gold, buy silver? Why poor man's gold is quietly becoming the real treasure
After making tons of money playing the safe haven trade, gold bugs are now shifting to silver in a dramatic bet that the white metal's time has finally come. Silver ETFs have surged around 18% in the last three months, crushing gold ETFs' modest 4% return as speculators abandon the stretched yellow metal for what could be the next mega trend in precious metals - poor man's gold. The silver surge hit fever pitch on Friday when MCX silver futures smashed to a lifetime high of Rs 113,000 per kg. In international markets, spot silver rocketed 3.9% to $38.46 per ounce last week, hitting its highest level since September 2011. The rally was fueled by intensifying safe-haven demand after US President Donald Trump announced sweeping new tariffs, including a 35% duty on Canadian imports and blanket levies of 15% to 20% on most other trade partners starting August 1. "Now it's not a question of should you own silver or about how much do you own," said Apurva Sheth, Head of Market Perspectives & Research at SAMCO Securities, highlighting the urgency gripping silver bulls. The white metal's explosive move comes as gold veterans sound the retreat. Gautam Shah of Goldilocks Premium Research, who rode gold from $1800 to $3500, abandoned his position last month. "Most of the positives were priced in and it has gone into a longish consolidation phase which is going to continue. But over the last few months we have been very-very bullish on silver," Shah said. His confidence in silver's potential is staggering. "If you have to take a 12- to 15-month view, I think $43 I would say is a medium-term target and $50 on silver is probably a slightly more longer-term target," Shah predicted. Also Read | Silver hits record Rs 1.11 lakh/kg in India: What's fueling the rush to safe haven? The shift reflects more than just profit-taking. Speculators are showing a stronger preference for silver over gold, likely due to the stretched gold-to-silver ratio and the prospect of silver prices catching up to gold's recent gains. Silver also benefits from supportive supply-demand dynamics, with the global market facing its fifth straight year of deficit. Motilal Oswal Financial Services , which had been bullish on gold since Rs 30,000 levels targeting Rs 50,000, called it quits earlier this month. "We've witnessed gains exceeding 30%, and historical data over the past 25 years shows that Comex gold has never achieved more than 32% returns in a single year," the brokerage noted, adding that "some signs of market fatigue are also emerging at these higher levels." The supply threat adds another explosive element to silver's story. "Silver is already in short fall. If US or other nations were to announce similar tariffs on silver or even worse ban exports like China has done in case of rare earth minerals then it could send silver prices to stratospheric levels," warned Sheth. The backdrop couldn't be more supportive of precious metals. The dollar index has dropped close to 10% over the last six months and about 10% since the beginning of this calendar year, according to Emkay Wealth Management. "This has already been priced in the gold prices in the international markets, but what we need to see is a further fall in the dollar caused by official rate cuts and a fall in market yields," the wealth manager noted. Emkay highlighted two key factors driving precious metals: the direction of US interest rates and an anticipated decline in the US dollar. "Given the economic conditions and the relatively lower inflation numbers, the likelihood of the Fed going in for a rate cut or two before the end of this calendar year is very high," the firm said. However, the new budgeted spending to the tune of $4.60 trillion could complicate matters. "The situation could become murkier because the resultant borrowings may put upward pressure on the yields," Emkay warned. For now, silver appears to be the precious metal of choice for those seeking the next big move. As Shah puts it: "If you are booking profits in gold, this might be a good time to top up on silver. Looks like a large mega trend is coming for this commodity." The question for investors is no longer whether to own precious metals, but which one will deliver the bigger payoff in the months ahead. ( Disclaimer : Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
Economic Times
01-07-2025
- Business
- Economic Times
When liquidity takes over, common sense takes a backseat; for next 10-12 days, ride the market move: Gautam Shah
Gautam Shah, Founder, Goldilocks Premium Research, says after a period of underperformance, the metals sector is poised for a potential 15% upswing, with both ferrous and non-ferrous stocks presenting attractive opportunities. Real estate also emerges as a compelling play on the India growth story, offering favorable risk-reward profiles. Additionally, select PSU stocks, particularly PSU banks, appear lucrative at current index levels due to their low P/E ratios. What is your view of the world? Lots of new highs, Bitcoin, S&P, Nifty, Nasdaq? Gautam Shah: Who would have thought – based on common sense and rationality – that markets would be at lifetime highs globally, given all the geopolitics that we have gone through in the recent past? It just tells you that when liquidity takes over, common sense takes a backseat. We saw that in the 2003, 2007 bull markets as well. But the price action has been crystal clear. We have been maintaining a bullish view despite all the uncertainties in the recent past. The setup continues to be quite solid. The Nifty went through a five-week lull where a lot of people thought that it was distribution, but actually it was consolidation. It was about building a higher base and thereafter, once the Nifty got past 25,200, the momentum only got better. Even now, there are no real signs of topping out. The market is headed towards the previous high of 26,200 and we review it there. I would say just stay bullish, do not overthink; participate and ride this move, be in the right pockets. It is great to see the broader markets do so well. With the midcap 100, the smallcap 100, all doing well with the largecaps. We seem to be in a bit of a sweet spot and the next 10-12 days should be sorted. But when the earning season kicks off, we will have to just take a step back and review the scene. But till then, all is well. So, for the next 10-12 days just stay with the market, do not go long, do not go short. But what happens after that if the earning season is not satisfactory, a little bit of a miss, a little bit of a hit? If it is okay, then are we in for a bad patch? Gautam Shah: It is unlikely because we have handled a lot of stress locally and globally. Let us not forget we went through a bear market for the broader markets between October 24 and March 25 where the average decline in stocks was about 36-37%. So, coming out of that bear market, coming out of some sort of a slowdown on an economic front, I think the numbers should only pick up. From what I learn from our influential clients, it seems it would not be too bad. In fact, it can only get better from here. Given all that RBI has done in the last two, two-and-a-half months, it is a huge tailwind for the corporate world. So, given all that, I do not think there is room for much disappointment and the market should be on track and we should see further upside towards lifetime highs, when we review. The last time we connected was back in May. You were very positive on Reliance. You said that the Reliance comeback will be very good and we have seen that shaping up. Reliance from close to Rs 1,150 odd is now sitting at Rs 1,500. The stock is retesting the levels of September highs. Why do you believe this time is different for Reliance because some of the brokerages are raising the target. What are you looking for in the technical front? Gautam Shah: More than the specific stock, the fact is there are too many things firing for the Nifty. We saw the banks do well. We saw Reliance making a strong comeback from the recent lows. That helps the overall market because there are too many factors and sectors we are batting for the Nifty. The Reliance comeback is obviously positive. I do not want to comment on specific stocks, but the entire sector looks quite encouraging and there is a high probability that it goes on to test the previous high. But we really take it from there. More than Reliance and energy, the sector that we have been very bullish on for the last three to six months is financial services and it is going to go on to do bigger things. Valuations are comfortable, fundamentals are excellent, earnings visibility is there and smart money action seems to be there and the charts are in great shape. Financial services is the place to be in and if you have to participate in this market rally, you need to be in financial services, housing finance companies, insurance companies, NBFCs, banks for the next three to six months. Anything else in terms of individual themes or ideas which are showing signs of sectoral churn? Gautam Shah: Yes, one thing is very clear that the big winners of the last three years are not doing as well anymore. That is very visible with what has happened in the last three or four months. Among the two pockets that we really like at these levels -- number one is metals. I have said this on multiple platforms in the last many months, I feel that the metals index is setting up for a 15% up move from current levels. A lot of these stocks are beautifully placed on the charts both ferrous and non-ferrous, even though our preference is more non-ferrous. There are big moves of anywhere between 15% and 30% in individual stocks coming. So, metals is a theme that one cannot ignore given the world that we live in currently. Secondly, if you have to play the real estate story, sometime back it was about power and infra which it still is and we continue to like it, but real estate is also a very good proxy to the India story right now and the entire real estate pack, the top five or seven names look excellent. So, you will be getting excellent risk-reward based long positions there. Just to add one more pocket here is PSU. At a 25,500 index can you get a high single-digit PE stock? PSU banks are right up there. So, the entire PSU basket at such elevated index levels looks very interesting and lucrative.
