Tapan Patel, Fund Manager – Commodities, Tata Asset Management.
The festival season is at the doors while we think of gifting to our dear ones on auspicious occasions like “Dhanteras” and ‘Diwali” for best of their future. Gifting an investment by securing their financial future may be the greatest gift that your loved one will cherish and remember over the years.
Apart from traditional investment instruments, one may always look for to provide stable future returns and diversification over high-risk investments which may grow over the time to secure future. Gifting on auspicious occasion is a special blessing to the loved ones and one may think of gifting something divine or pure. Hence, we generally see the gifts in form of Gold or Silver still in trend over the years.
Gold and silver prices have witnessed healthy correction in 2026 compared to the record rally during the same time in previous year. The macro-economic factors like inflation, elevated yields and central bank tightening have dominated for short term over supportive long-term factors. We believe factors deterioration in global growth, diversification in terms of Central banks buying and de-dollarization and debasement risk in terms of US fiscal concerns may continue to provide structural support for long term investment into gold and silver. The macro situation may shift anytime with change in geopolitical factors.
The current environment of global uncertainty, macro headwinds and geopolitical factors have given rise to the investment into commodities beyond gold and silver. Investors have realized the benefit of having portfolio allocation to commodities in recent years. War like situations, trade wars, pandemic and change in weather patterns have resulted into large price fluctuations in commodities. This Diwali, Investors may look to build modern portfolio with optimal asset allocation into commodities to protect the overall portfolio rather chasing momentum.
Investors have options to invest in commodities through registered commodity exchanges, ETFs, Sovereign Gold Bonds and various schemes of Mutual Fund having commodity exposure. The various asset management companies are now offering an opportunity to invest in commodities through hybrid/multi asset schemes. while few offers investment through ETCD adopting beyond gold approach with diversification in other commodities along with gold and silver.
