Commodity Outlook & india’s Investment Landscape: A Julius Baer Viewpoint

As global markets grapple with shifting growth expectations and persistent geopolitical undercurrents,commodities and capital flows have once again moved to the centre of investor conversations. In a wide-ranging interaction with ET Now, Mark Matthews from Julius Baer shared his perspective on where key commodities could be headed, how foreign investors are reassessing India, and which pockets of the market continue to offer long-term prospect amid near-term dullness.

The discussion began with commodities, a space that has seen sharp divergence in recent months. While gold has been under some pressure and Brent crude has slipped back below the $60 mark, silver has quietly powered to fresh highs, clocking an extraordinary run-up of about 128% since the start of the calendar year.

Mark Matthews pointed out that silver’s strength is rooted in fundamentals rather than froth. “Well, silver is a necessity for many parts of industry including defense related products and those are going to be in high demand over the next few years.” The industrial and strategic uses of silver, especially in defence, underpin its longer-term demand outlook.

On gold, he drew attention to an India-specific angle that often gets overlooked in global debates. “Gold, I might just point out, the largest owner of gold in the world is Indian households, private owner, 25,000 tonnes. So,they are now a trillion dollars wealthier in aggregate than they were this time last year,though they are not necessarily selling it.”

India’s Attractiveness to Foreign Investors

Turning to India, Matthews addressed the recent reassessment by foreign investors. He noted a shift in sentiment, driven by factors beyond just headline economic numbers. “India is a long-term story,and it’s not just about the next quarter or the next year. It’s about the next decade. And the demographics are very favourable.”

He highlighted the importance of political stability and policy consistency for sustaining investor confidence. “Investors want to see a stable political surroundings and consistent policies. That’s what will attract long-term capital.”

Matthews also pointed out that while valuations in some sectors may appear stretched, opportunities remain in specific areas. “There are still pockets of opportunity in India, particularly in sectors that are benefiting from the country’s long-term growth trends, such as financials, consumer discretionary, and infrastructure.”

Key Takeaways

• Silver’s recent surge is driven by industrial demand,particularly in defence,and strategic importance.
• India holds the largest private reserves of gold globally, representing notable wealth.
• India remains a compelling long-term investment destination due to its favorable demographics and growth potential.
• Political stability and consistent policies are crucial for attracting sustained foreign investment.
• Opportunities exist in specific sectors like financials, consumer discretionary, and infrastructure.

Publication Date: 2025/12/18 18:04:06