While the pullback has sparked questions on whether the precious metals cycle has peaked, Kadam believes the current softness is a temporary consolidation, driven largely by profit-taking, currency moves, and uncertainty around the pace of global rate cuts.
He maintains that the long-term structural drivers—from central bank buying to geopolitical risk—remain firmly in place, suggesting that this is a pause, not a trend reversal. Edited Excerpts –
Q) Thanks for taking the time out. We have seen fresh momentum in markets which pushed benchmark indices higher last week largely on trade deal hopes. How are you reading all this?
A) Markets gained fresh momentum last week, buoyed by optimism over the India–US trade deal, festive cheer, and the recent GST cuts that have strengthened hopes of a consumer demand revival.
Benchmark indices advanced as investors welcomed the twin boosts of global and domestic catalysts; easing trade tensions with the US and policy measures aimed at stimulating consumption.
Festive season demand, supportive global cues, and expectations of a softer monetary stance further reinforced risk appetite.
However, even amid upbeat sentiment, adequate equity valuations mean the rally’s durability will depend on how effectively trade and policy tailwinds translate into sustained earnings growth.
Q) Precious metals, which broke all records, cooled off a bit in the past few weeks. Do you see further weakness, or is it just a pause?
A) Precious metals appear to be entering a short-term cooling phase after their record-breaking rally, as profit-taking, a firmer dollar, and uncertainty over the pace of Federal Reserve rate cuts weigh on sentiment.
In the near term, gold and silver may consolidate or drift lower as overbought technicals unwind and physical demand softens at elevated prices.
However, the broader outlook remains constructive: easing inflation, the prospect of eventual rate reductions, strong central-bank purchases, and persistent geopolitical risks all provide a solid foundation for renewed strength once the market stabilizes.
In short, the current weakness looks more like a healthy pause within an ongoing, long-term uptrend rather than the start of a sustained decline.
Q) The US Fed seems to be on an easing spree with the recent 25 bps rate cut. How would that impact RBI policy back home and equity markets?
A) The Fed’s recent 25 bps rate cut eases global interest rate pressures, creating a supportive backdrop for India. This could give the RBI some room to consider monetary easing, though any move will depend primarily on domestic factors such as inflation, currency stability, and growth momentum.
For equity markets, lower U.S. yields and a potentially weaker dollar may attract foreign inflows, strengthen the rupee, and boost investor sentiment, particularly benefiting sectors reliant on domestic demand and cheap financing.
Q) Most of the Nifty50 companies have come out with their results. How are you reading into numbers, management commentary, and revival of earnings?
A) The Q2 FY26 earnings season for Nifty50 companies has been a mixed bag, indicating a cautious recovery rather than a broad-based revival.
While some sectors showed healthy growth and margin resilience, others delivered tepid results with pressures on profitability.
Management commentary has been conservative, pointing to uneven demand, cost challenges, and limited forward visibility.
Overall, although pockets of strength are evident, a sustainable earnings revival across the index has yet to materialize, suggesting that investors may need to remain selective and monitor for clearer signs of broad-based momentum in the coming quarters.
Q) Also, do you see any red flags that investors should track or watch out for in the next few quarters from the earnings?
A) Despite pockets of strength in Q2 FY26 earnings, investors should remain alert to potential risks. Profitability may come under pressure from rising input costs, logistical challenges, uneven demand, or sluggish volume growth.
Conservative or downward earnings guidance could indicate that the quarter’s performance was temporary, while global headwinds such as slower export demand and currency volatility may weigh on export-dependent sectors.
Furthermore, sectoral divergence and the gap between reported profits and actual cash flows could pose challenges for those expecting broad-based recovery.
Keeping a close eye on these factors will be essential to distinguish temporary gains from a sustainable earnings revival.
Q) Which sectors are looking attractive now ,post Q2 earnings?
A) Post Q2 FY26 earnings, certain sectors appear more attractive for investors seeking selective growth opportunities.
Construction materials and cement are showing signs of revenue rebound and improving margins, while specialty chemicals and materials benefit from a recovering global cycle and better product mix.
Consumer and rural‑facing discretionary segments demonstrate resilience, driven by premiumisation and steady rural demand. Additionally, infrastructure, capital goods, and select real estate plays may gain from policy support and ongoing capex momentum.
However, investors should remain cautious, as margin pressures, uneven demand, and stretched valuations mean that gains are likely to be selective rather than broad‑based.
Q) What is your view on the recent wave of new listings on Dalal Street? Are there any interesting names you’re tracking? Also, given that most IPOs leave little on the table for retail investors, do you think it’s better to look for opportunities in the secondary market?
A) The recent wave of IPOs on Dalal Street presents both opportunities and challenges for investors. While some listings offer early access to high growth business models, the average listing gains have moderated compared to previous years, and post listing performance has been uneven.
Many IPOs are heavily priced, with a significant portion reserved for existing shareholders, leaving little upside for retail investors.
Given these dynamics, it may be prudent for investors to adopt a selective approach, evaluating fundamentals and growth prospects carefully, and consider looking for opportunities in the secondary market, where valuations may have corrected and companies with solid performance are easier to identify.
(Disclaimer: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times)