Silver has the potential to rise by 25% to 30% this year from current levels, according to Gautam Shah, founder of Goldilocks Global Research. The market expert predicted a significant opportunity in silver amid gold reaching an “intermediate top” of around the $3,400 to $3,500 level.
“I’ve said all along in the last six months silver is a big opportunity; it has done much better than gold. The gold to silver ratio has actually seen a breakout and I do see a very large move for about 25% to 30% on silver from current levels. I think some silver proxy stocks, and there are a handful in India, make a lot of sense as well,” he said in conversation with NDTV Profit on Friday, June 27.
Shah predicted Nifty could hit 26,200 soon. He was equally optimistic about broader market opportunities. “I think the rest of the year is about being picky, about stocks being on the right themes, right pockets, and I think that’s where real returns will be made,” he said.
He urged investors to think like a “Test cricketer and not go about things 20-20,” advocating a “buy and hold” strategy. He predicts that both the mid-cap and small-cap indices are also on track to hit new lifetime highs.
“If I have to take a two-year view and I do believe that over the next 12 months we are sorted, then 28,400 is my working number. So, as long-term investors, if you are playing the India story passively or actively, 28,400 is your number,” he said.
Gautam Shah’s Favourite Sectors
When asked where investors should focus, Shah identified three key themes for the next six to 12 months. “Our three favourite picks are financial services, real estate and metals. I think this is where serious returns will be made over the next six to 12 months,” he said.
Outlining the potential growth prospects of the banking sector, he said that the Bank Nifty is on course to hit 60,000, representing a significant rise from current levels. He highlighted strong performances from major players like HDFC Bank and the State Bank of India, as well as smaller private banks.
He was also bullish on Public Sector Undertaking stocks, particularly in the banking, power and defence sectors.
“I personally feel that the entire PSU pack is going to see the next wave of the long-term uptrend that started three years back,” the top executive said. He noted attractive valuations and strong earnings visibility as the major factors to aid the rally.
He was equally bullish on the metals sector, predicting a potential 15% upward move for the metals index, driven by the “China plus one” strategy and the market having already priced in concerns over tariffs. He specifically noted that non-ferrous metal stocks could outperform.
“We are extremely bullish on the metal stocks. I am looking at a 15% move on the metals index from these levels, something which I don’t see in most other sectors in the market,” he said, adding the way Tata Steel, JSW Steel, SAIL, NALCO, Hindalco have behaved in the recent past indicates a bigger trend for the metals pack.
He cautioned against paint companies, describing them as underperformers with expensive valuations, and advised steering clear of IT stocks due to external headwinds and rich valuations.
“I don’t see alpha being generated in IT,” he said.
Shah was cautious about the consumption theme, which drove previous market rallies.
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