PACE 360 is reducing its exposure to fixed income after maintaining a high allocation to the asset class. Over the next two weeks, the firm expects to be largely invested across equities, gold and silver.
“We expect Nifty could go all the way to 26,000 to 27,000 over the next two to four months. It sounds very distant, but I am an optimist here, and I think it could happen. Gold and silver, I must reiterate that we are only looking at relief rallies. We are not looking at we are not looking at a 30-40% up moves,” he added.
Goel said the recent weakness across asset classes has been driven largely by rising US bond yields and a stronger dollar. The pressure has extended beyond precious metals to Indian equities, emerging markets and, more recently, US stocks.
“I can safely say that over the next week to 10 days, most of the asset classes will find their bottoms, and post that I am looking at a handsome rally in gold, silver, and pretty much everything else over the next two to three months,” he added.
His expectation is that the current pressure from rising yields and a stronger dollar will ease in the near term, allowing risk assets to recover before the next phase of the market cycle unfolds.
Goel expects gold and silver to potentially extend their recent lows by another 1-3% over the next one to two weeks. However, he sees the subsequent recovery as a relief rally rather than the beginning of a sustained bull market.
“It’s a good idea to buy them on dips over the next two weeks, and then just sit on them for the next two to three months because I see a handsome rally in the making,” he said.
According to Goel, gold could rise 10-15% from its eventual bottom, while silver could gain 15-20%. He expects the broader bear market in the two precious metals to resume after this recovery.
For full interview, watch accompanying video
