Jefferies' Christopher Wood sees gold at $10,000 'sooner or later'; likes India's small, midcaps

Gold may be in a consolidation phase, but Jefferies' Global Head of Equity Strategy Christopher Wood Wood remains bullish on the precious metal over the long term and expects its price to eventually reach at least $10,000 an ounce.

In an exclusive interaction with Business Today Television (BTTV), the market veteran said he does not expect the US to have much room to raise interest rates, citing the country's fiscal situation.

"Gold's in a consolidation, but long term I remain bullish on gold. I don't believe the US can really raise rates much. I don't think the US can handle higher rates because the fiscal situation is very bad," Wood said.

Given his outlook, Wood said investors should have exposure to gold. He suggested those who do not own the precious metal could consider buying it, while existing investors could add if prices decline.

"In my view, the gold market price is going to at least $10,000 sooner or later," Wood added, saying such a move would be a "big positive" for Indian consumption spending.

Wood also distinguished between other commodities. He described silver as "just high beta gold", while saying copper is also a good player but is more closely linked to the artificial intelligence (AI) build-out. He also highlighted the importance of including real assets in portfolios.

Why foreign investors sold Indian stocks

On foreign investor selling in Indian equities, Wood said the outflows were largely driven by developments in the global semiconductor sector rather than India-specific factors.

"All the money's being made by the semiconductor companies. This is the biggest semiconductor cycle ever," he stated.

Wood also said that 95 per cent of the reason foreigners sold Indian stocks last year "has absolutely nothing to do with India" and was instead linked to higher allocations to semiconductor companies in Taiwan and, particularly, South Korea.

Small, midcaps catch his eye

Wood said the small and midcap segment is the most interesting part of the Indian market. "The most interesting part of the Indian market is the small and midcap area because you have lots of interesting companies," he stated.

According to Wood, large caps have lacked exciting themes over the past three years, while India's vibrant small- and midcap market is "very healthy".

He expects mid and smallcaps to outperform over the long term, although he said there could be short-term pain amid West Asia tensions.

Wood also cited crude oil as a key monitorable for Indian markets, particularly amid the ongoing geopolitical tensions.