Kotak Neo's Anindya Banerjee sees crude, Fed policy driving commodities

Global macro headwinds and crude volatility to drive commodity markets: Kotak Neo

Mumbai, October 26

Speaking exclusively with ANI News in Mumbai on Monday, Banerjee provided a detailed perspective on precious metals, energy, base metals, and portfolio allocation strategies for retail investors.

Addressing the recent price swings in precious metals, Banerjee clarified that gold is currently tracking macroeconomic fundamentals rather than traditional safe-haven demand.

"In the very short term, gold and silver-especially gold-is acting not as a safe haven; it's more acting as a play on the real interest rates on the dollar," Banerjee explained.

He highlighted that rising oil prices have fueled expectations for extended Federal Reserve rate hikes, driving recent selling pressure across bullion.

On the domestic front, Banerjee noted that physical demand remains supported during the festive period despite market turbulence.

"We have seen a good pickup in consumption demand, jewelry demand, and physical demand since Navratri, and we expect that to hold up into the festive season," he said, adding that central bank accumulation and institutional buying continue to provide a long-term cushion.

Shifting focus to energy and inflation, Banerjee cautioned that elevated crude oil prices pose a direct challenge to domestic inflation and currency stability.

"For this financial year, inflation is going to rise at least till Jan-Feb," he stated, highlighting that WPI remains elevated and CPI is creeping toward the 6 per cent threshold.

Regarding the Indian rupee, he noted that intervention boundaries remain well-defined. "USD/INR 94.30-94.40 is the floor... and on the upside, anything closer to 95.50, RBI is going to be aggressive," Banerjee observed.

Commenting on industrial metals, Banerjee pointed out that copper movements are heavily tied to trade policies and technology sector sentiment. "Copper is largely a play on the US tariffs... if the AI trade cracks harder in the coming weeks, it can also have a negative impact on copper," he explained.

To help retail investors navigate choppy equity and commodity markets, Banerjee advised leveraging commodities for structural portfolio hedging.

"It's a good opportunity for them to allocate because as we step into 2027, a lot of the risks can actually hit the market," he advised, recommending dips in gold and silver as attractive entry points to hedge against broader global uncertainty.

— ANI