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Right. So, good time to get in Edardini, the president at Yadini Research joining in. Yadini, you know, it seems like uh this uh week when the US Fed meets a 25 basis points rate cut is on the cards already. With regards to you know the flows back to other emerging markets because of lower cuts, do you think that will happen or the street will keep backing the US or where does money go?
Does it go to gold? Well, it definitely has been going to gold. Gold has been one of the best performing assets this year. Gold miners have also done extremely well and a lot of that has to do with the fact that central banks are uh accumulating gold, particularly central banks of countries that don't share America's uh policy views.
Uh at the same time, the stock market overall on a global basis has done very well. I think emerging markets as we're discovering this year is kind of a case by case. I don't think you can kind of generalize and say the entire emerging markets world is going to go up or going to go down. Uh India had a a great uh performance uh over the past few years and now I think we're just seeing some profit taking some consolidation of those gains.
Uh and I still think it's a bull market over in India. Indonesia's got some issues with their their politics. Um, Brazil has some issues. So, uh, yeah, I I think the market has been going to the extent that global investors haven't gone to the US, they have gone to Europe, but um the data coming out of Europe is not anything to really get excited about.
I know some people are talking about 120 on the euro. Uh but I don't uh share that uh optimism on the euro and I don't therefore I don't share the pessimism on the dollar. Yeah, Ed morning 25 or you think there's a outside chance of a 50 basis point cut this week. Well, you're asking you're asking the wrong person because I've been advocating for no increase at all because I think the economy is doing fine.
Maybe the labor market's showing some signs of weakness, but the real economy is still growing. So, productivity must be making a big comeback. But I have to be realistic, and the realistic fact is uh the uh the Fed will most likely do 25 basis points. I seriously doubt they'll do 50 basis points. Uh maybe if um they get uh Steven Myron uh on the committee before the vote, he'll try to convince him to do 50 basis points.
He was the head of the council of economic adviserss and obviously he and the president have been pushing for uh a big drop in uh in interest rates. I'll be looking to see what's uh how the react the bond market reacts because I think it could react the way it did last year when the Fed cut by 100 basis points at the tail end of last year and the bond yield went up a 100 basis points.
I will not be surprised if the bond yield does not go down along with the Fed rate cut. Right. Uh you know Pashant there was something very interesting that I heard on the weekend old investor telling me that increasingly people are moving not from uh equity to gold but they're moving from debt to gold.
The reason for that is because uh with the interest rate cuts coming by unexpected the return on debt is likely to reduce but at the same time the price of gold while it is high you're not likely to see as much price correction as you would see time correction. So downside on gold is less than equity and the upside is more than debt.
So the Sharpie ratio is definitely better. And if you compare the size of the equity market versus the size of the debt market, it's a big one, the debt market. So if that money goes into gold, there is no reason to believe that gold will not continue to move higher from these current levels as well.
So that was an interesting one. But you know, Ed, you said emerging markets case by case. So the obvious question, what do you look uh uh at when you're looking at India right now? valuations yes high but you know it has been an underperforming market lately with a few triggers coming in on the domestic consumption front.
The only uh imponderable right now is what takes place the US uh India trade but you know from an economy standpoint that does not account for much when you look at the EPS of the nifty. Yeah, look uh my my uh view is uh stocks are meant to be held for the long run and uh I think we've got a long run bull market in India because the long-term prospects for India are very good.
I think it would also help if Modi delivered maybe perhaps more reforms to the to the economy but it's got a lot going for it with companies moving out of China moving into India and so I think that's that's the the fundamentals are positive and uh markets behave in a fairly predictable way I mean you've had a tremendous bull market in India and seeing some consolidation some profit taking is a is a healthy development and it could set up India for resumption of the bull market next year, which is what I would expect.
U I've got that. So Ed, do you have targets on gold here? Just to Yeah, I've I've been talking, you know, I've I've discussed this with you folks before. I when the uh uh price of gold went above $2,000 an ounce last year, I turned bullish on it. Uh and then when it went uh above 3,000, I I did start to establish targets and I said, you know, so at the beginning of the year when we went above 3,000, I said, I think we can go to 4,000 by the end of this year.
And if we get to 4,000 by the end of this year, I think we can get to 5,000. Uh as you know, it's pretty hard to uh come up with a model for for valuing gold. Uh but I think the point uh you folks just made about the um money probably coming out of debt and going into gold makes a lot of sense because there are basically debt crises going on right now, sovereign debt crisis going on in France, the UK and Japan.
Uh and I think people are still nervous about the United States fiscal situation. So all in all um gold uh looks like a winner. Gold looks like a winner. Um would you look at people playing silver now as a proxy as well because I mean gold some are saying it's uncatchable at these prices? Well, you know, gold is at a big move, but uh maybe you know they they keep saying that uh Bitcoin is the the digital gold.
Uh may maybe gold is kind of uh the the physical Bitcoin. I mean uh you know we we we've seen extraordinary moves in Bitcoin and part partly that's because there's a huge market uh potential market for these assets that are viewed as safe havens that are very hard to to to value. So the price is whatever the market deems the price to be.
Uh and so we've seen Bitcoin go up dramatically. Now, Bitcoin's been uh also consolidating of late and it's been gold's turn. Um but um I think in addition uh to uh the safe haven ID, I think that you know the obviously the geopolitical environment remains very unsettled and unsettling and so that's good for gold.
But uh the most important underlying support for gold is that ever since Russia invaded Ukraine and the United States froze the assets of the Russians, uh countries like China, Venezuela, Iran, North Korea have decided that they don't really want to have too much in in in the US dollar and would much rather prefer to have it in gold when it comes to their international reserves.
All right. Uh thank you very much uh Ed. Great speaking with you as always here on CNBC TV. Thank you.
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