What Is Motilal Oswal’s Outlook on Gold and Precious Metals Amid Rising Prices?
A Motilal Oswal Fund Manager has shared a constructive view on the gold and precious metals sector, emphasizing how rising gold prices are supporting multiple segments of the economy. The rally in bullion is improving profitability for gold-financing firms while driving greater activity on commodity exchanges.
According to the fund manager, the recent uptrend in gold prices not only enhances the value of underlying collateral for gold-loan companies but also improves overall portfolio quality. As higher loan-to-value (LTV) ratios become feasible, lenders can expand lending volumes on the same physical gold base, improving spreads and returns.
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The fund manager also noted that MCX (Multi Commodity Exchange) is likely to benefit from rising gold and silver trading volumes. Higher volatility typically results in stronger participation from both hedgers and speculators, thereby improving exchange earnings and transaction fee growth.
On the company front, the outlook for Eternal Jewellery remains optimistic despite near-term softness. Management expects a temporary slowdown due to elevated input costs and increased inventory investment following the sharp gold rally. However, the fund manager maintained a Buy rating with a target price of ₹410, citing a strong long-term growth trajectory.
Analysts at Motilal Oswal believe that structural demand for precious metals is set to remain strong, driven by global inflationary trends, central bank gold purchases, and diversification strategies among institutional investors. Indian consumption, festival demand, and jewelry exports are likely to offer steady tailwinds over the medium term.
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As global monetary uncertainty continues, the role of gold as a hedge against currency depreciation and inflation remains vital. Domestic jewelers, financiers, and exchanges are set to benefit from sustained investor appetite, positioning India as a long-term hub for precious metal investments.
✅ Investor Takeaway: Indian-Share-Tips.com Nifty Expert Gulshan Khera, CFP®, who is also a SEBI Regd Investment Adviser, observes that rising gold prices are structurally positive for gold lenders, MCX, and jewelry firms like Eternal. While short-term corrections may occur, the medium-to-long-term trajectory for the precious metals space remains bullish given global macro support and domestic consumption resilience.
SEBI Disclaimer: The information provided in this post is for informational purposes only and should not be construed as investment advice. Readers must perform their own due diligence and consult a registered investment advisor before making any investment decisions. The views expressed are general in nature and may not suit individual investment objectives or financial situations.
