Gold, silver sparkle for seventh week; Helios Capital's Dinshaw Irani says rally has more legs

Gold and silver have continued their spectacular rally, extending gains for the seventh consecutive week and scaling new record highs. While some investors are beginning to wonder if the momentum appears stretched, Dinshaw Irani, CEO of Helios Capital, believes the precious metals still have 'some' room to shine.

Speaking to Business Today on Tuesday, the market veteran said the uptrend in gold and silver prices remains supported by two key factors -- central bank buying and global economic uncertainty.

"More and more central bankers -- the biggest buyers of precious metals today -- are stocking up on these commodities," Irani explained. "This shift is driven by the desire to move away from dollar reserves to gold reserves. In fact, one significant global data point shows that gold reserves have now exceeded dollar reserves for most central banks. That clearly suggests there's still some steam left in the rally."

Irani also cited geopolitical and trade uncertainties as another major driver. "The ongoing uncertainties on the international trade front are not good for equity markets. These are exactly the kind of times when gold becomes the go-to investment. So, that's what's playing out right now," he said.

However, he expects the rally to moderate in the coming quarters. "It's probably too early to call the peak, but I think there could be another couple of quarters of this rally before prices start to flatten. I don't foresee a correction, just some consolidation," he added.

With that being said, Irani advised investors to maintain diversification in their portfolios. "You can diversify your bets, but our firm belief is that equities, over the long term, will definitely outperform any other form of investment," he said. "And if you ask me what defines the long term, I would say it's the amount of time equities need to deliver returns comparable to gold -- that's how one should view long-term investing."