Old is gold: Zerodha’s Nikhil Kamath bats for gold to 'follow smart money'
Gold prices: Gold has been bullish since October 2022 on back of recession fears. Further, the prices have gone up after China, which is the biggest consumer of gold, decided to roll back its Covid-19 restrictions, and hinted at opening up its economic activities.
Basudha Das
- Jan 6, 2023,
- Updated Jan 6, 2023 10:18 AM IST
Gold is indeed a smart investment tool during times of inflation. Also, in times of recession, it usually gains quite a bit of value. For example, between 1970 and 1980, when there were three recessions and inflation reached well into the double digits, gold's value jumped from $35 per ounce to $850, as per data shared by NASDAQ.
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Even Zerodha's Nikhil Kamath agrees that indeed an investment in gold is a good idea to 'follow smart money'. In a post shared both on LinkedIn and Twitter, Zerodha's co-founder Nikhil Kamath said that investing in gold is a smart way as the yellow metal has a better track record as a hedge against inflation.
"Old is gold; always a good idea to follow the smart money. Gold's track record as a hedge against inflation is better than any," Kamath said in his tweet.
Investors should note that gold prices are trading at a high since the beginning of this year and almost touched a near all-time high. On Multi Commodity Exchange (MCX), gold February futures were trading at Rs 55,820 per 10 grams, up 0.1 per cent on Thursday. In comparison, gold touched an all-time high of Rs 56,200 per 10 grams in August 2020.
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Gold has been bullish since October 2022 on the back of recession fears. Further, the prices have gone up after China, which is the biggest consumer of gold, decided to roll back its Covid-19 restrictions, and hinted at opening up its economic activities.
Even many experts have predicted that the yellow metal may touch its all-time high mark of Rs 62,000 in 2023 after facing a highly volatile year in 2022. An ICICIdirect report said that gold prices are likely to rise mainly on the back of weakness in the dollar as the US Fed is likely to pause on rate hikes early next year and may even cut rates in Q4 2023.
Kamath added that he maintains a fixed 10 per cent allocation in gold through all market cycles. "I maintain a fixed 10 per cent allocation to gold through all market cycles," he said.
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Gold in the international market is expected to trade in a range of $1670-2000/oz with a positive bias in 2023. On the MCX Gold may trade in a range of Rs. 48,500-60,000/10 grams, as per experts.
“Gold might finally get the recession it needed to glitter in 2023. Of the 7 US recessions since 1973, gold performed well during five. World Gold Council research has shown that yellow metal has been a top performer among asset classes during periods of stagflation. A period of stagflation is a reasonable scenario for 1H23, though regional differences exist. Together, with a looming recession, reasonably higher inflation, a falling dollar, and a highly uncertain geo-political situation, gold is expected to perform well in 2023. Investors should buy the dips as Fed tightening might cast a dark shadow until at least Q1 2023,” said Ravindra V. Rao, CMT, EPAT VP-Head Commodity Research, Kotak Securities Ltd.
Gold is indeed a smart investment tool during times of inflation. Also, in times of recession, it usually gains quite a bit of value. For example, between 1970 and 1980, when there were three recessions and inflation reached well into the double digits, gold's value jumped from $35 per ounce to $850, as per data shared by NASDAQ.
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Even Zerodha's Nikhil Kamath agrees that indeed an investment in gold is a good idea to 'follow smart money'. In a post shared both on LinkedIn and Twitter, Zerodha's co-founder Nikhil Kamath said that investing in gold is a smart way as the yellow metal has a better track record as a hedge against inflation.
"Old is gold; always a good idea to follow the smart money. Gold's track record as a hedge against inflation is better than any," Kamath said in his tweet.
Investors should note that gold prices are trading at a high since the beginning of this year and almost touched a near all-time high. On Multi Commodity Exchange (MCX), gold February futures were trading at Rs 55,820 per 10 grams, up 0.1 per cent on Thursday. In comparison, gold touched an all-time high of Rs 56,200 per 10 grams in August 2020.
Advertisement
Gold has been bullish since October 2022 on the back of recession fears. Further, the prices have gone up after China, which is the biggest consumer of gold, decided to roll back its Covid-19 restrictions, and hinted at opening up its economic activities.
Even many experts have predicted that the yellow metal may touch its all-time high mark of Rs 62,000 in 2023 after facing a highly volatile year in 2022. An ICICIdirect report said that gold prices are likely to rise mainly on the back of weakness in the dollar as the US Fed is likely to pause on rate hikes early next year and may even cut rates in Q4 2023.
Kamath added that he maintains a fixed 10 per cent allocation in gold through all market cycles. "I maintain a fixed 10 per cent allocation to gold through all market cycles," he said.
Advertisement
Gold in the international market is expected to trade in a range of $1670-2000/oz with a positive bias in 2023. On the MCX Gold may trade in a range of Rs. 48,500-60,000/10 grams, as per experts.
“Gold might finally get the recession it needed to glitter in 2023. Of the 7 US recessions since 1973, gold performed well during five. World Gold Council research has shown that yellow metal has been a top performer among asset classes during periods of stagflation. A period of stagflation is a reasonable scenario for 1H23, though regional differences exist. Together, with a looming recession, reasonably higher inflation, a falling dollar, and a highly uncertain geo-political situation, gold is expected to perform well in 2023. Investors should buy the dips as Fed tightening might cast a dark shadow until at least Q1 2023,” said Ravindra V. Rao, CMT, EPAT VP-Head Commodity Research, Kotak Securities Ltd.
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