Gold may underperform equities during Samvat 2080

Indian Stock Markets-Returns by equity markets for investors were phenomenal  during Samvat 2079 were phenomenal at around 11% for Sensex and Nifty. The precious metals as Gold and Silver on teh other hand however have gained slightly more than 21% and 29% returns respectively during Samvat 2079, outperformed the returns by the equity markets comprehensively.

The uncertainties in the global arena led by geopolitical risks have been one key reason for the outperformance by precious metals. The declining rupee, rising interest rates, Investment demand, buying by central banks, all have remained key reasons supporting the rise in prices of precious metals. The returns by precious metals during Samvat 2080 will be watched for by investors that remain encouraged by its returns in Samvat 2079.

Motilal Oswal Financial Services has given a medium-term target of ₹63000 for Gold.

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However, the prices of precious metals are influenced by geopolitical developments, that cannot be foreseen. Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services. 

Hence analysts are uncertain about the upside for the precious metal over a longer term. Comparatively analysts remain positive and confident of returns by the equity markets that may outperform their previous year returns.

Samvat 2080 can give better returns than Samvat 2079. Indian economy is showing great resilience and corporate earnings are good. A rally is likely in the market before the General Elections of 2024 if pre-election polls show political stability after elections said Dr Vijayakumar. Indian market is likely to receive a flood of money – both domestic and foreign lifting the markets. 15 percent or more Nifty returns are possible in Samvat 2080, added Vijayakumar.

Though Indian markets look expensive vis-à-vis other emerging markets, we do not find the current valuation expensive as India offers a sustainable and structural story which has the potential to reach a GDP of USD 5 trillion in the near future, said analysts.

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We expect markets to deliver a return of around 15% till next Diwali on the back of robust corporate earnings, strong domestic flows and reformist government measures, said Manish Chowdhury, Head of Research, StoxBox

Our sense is that the interest rate cycle around the globe looks close to the peak and should turn a corner going ahead which would be positive for risk assets such as equities. Though we do not rule out some volatility due to global uncertainties, we expect gold to underperform equities in Samvat 2080, said Choudhury.ce 

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Updated: 13 Nov 2023, 07:27 PM IST