Gold is seen as a haven for cash, says Saurabh Gadgil - CMD PNG Jewellers & VP IBJA
Saurabh Gadgil - CMD PNG Jewellers & VP IBJA (Indian Bullion & Jewellers association) on impacts of Brexit Britain’s exit from the European Union shocked global markets and unleashed uncertainty. The pound has jumped to its lowest level since last 31 years. Investors fled risky assets and turned to the dollar and the yen. While the magnitude of the market reaction is uncertain, the direction appears clear. Investors will now rush to safety and move steeply in global markets from risky assets to havens. For India, the economic impact should be smaller relative to other open economies in Asia. Still, India is not immune, as it has strong trade linkages with the EU and is susceptible to a loss of business confidence and a potential tightening of financial conditions. Any adverse impact could be partly cushioned by upcoming domestic impulses to growth such as good monsoons, pay commission hikes and a likely easing of policies (both monetary and fiscal). Gold and silver prices have soared and might reach as high as Rs. 36,000. Investors will pull their money from the stock markets and banks, seeking safe-haven assets instead like Gold Investments. If the Euro currency plummets, they will also look to get out of cash and into real money such as gold and silver. Gold is seen as a haven for cash.