Why BRICS Gold Demand Is a One-Way Street

We cover why currency debasement keeps gold demand one-way and how cultural behavior around gold shapes markets.

This episode is about understanding gold beyond headlines — and why much of the world already treats it as money.

Follow Monetary Metals on X: @Monetary_Metals

Hiren Chandaria joins Monetary Metals

Transcript

Monetary Metals:

Welcome back to the Gold Exchange podcast. Today, I am joined by Hiren Chandaria, the Managing Director of Middle East and Asia operations for Monetary Metals. Hiren has more than 20 years of experience in the gold and commodity sector. He’s played a central role in shaping India’s modern gold investment ecosystem by launching India’s first and largest gold savings fund.

He was the winner of CNBC’s Most Innovative Fund Award, and he managed yet another fund, which was ranked by Bloomberg as the best-performing gold globally. He also played a key role in creating India’s National Gold Pricing Index and the country’s first Refinery Accreditation Framework.

Now, Hiren is bringing that experience to Monetary Metals. He’s a CFA Charter holder. He’s a Sloan fellow from the London Business School. And today, he’s joining me to discuss how gold functions differently across the world, why this massive bull running gold and silver prices has happened, and of course, his macro outlook. Hiren, welcome to the show.

Hiren Chandaria:

Thank you, Ben. Hello, everybody. Good evening, good afternoon, good morning to everyone around the world. Thank you. That was a very generous introduction.

Monetary Metals:

Hiren, if we kept talking about your incredible background, we’d be here all day. So let’s jump right into the questions. You spent more than 20 years in the gold space and in the commodity space.

What have you learned over these 20 years? What got you into the space and what are you seeing today?

Hiren Chandaria:

Gold is a very interesting commodity because it has a history longer than most of the financial assets, if you look at it. That was one of the main things which drove me. I always believed in getting my fundamentals right. When I were looking in the financial markets, it was very difficult for me to comprehend most of the things without understanding the role of gold in the financial ecosystem. That really drove me to the gold market.

When I went there and when I tried to understand, I was so surprised by the way things have happened, like how gold standards were abolished, what happened to the fiat currency, the way it can be reprinted. It’s that got me thinking and that got me attracted to gold.

That’s how I ended up in gold. Then I moved to other precious metals. But that’s one thing which has surprised me, that baffled me rather, how fiat currency is taking over the world and losing its purchasing power and building the illusion that We are earning a lot of money. In fact, we are not in the fiat sense.

Monetary Metals:

And Hiren, what have you seen over those 20 years? Obviously, gold and silver prices have changed quite a bit, obviously for the upside.

But also, what about the market structure? What about the gold and silver market has changed? There’s been gold ETFs. There’s, of course, now tokenized gold. What about the gold market has changed the most to you?

Hiren Chandaria:

So I think the most important thing which has changed, in my opinion, has been the way gold has been invested and traded. If you look at it, previously, there was a lot of jewelry demand. India was the largest consumer of gold. There was a lot of jewelry demand, and the purity of gold was a big question mark. So the government has stepped in. They refined the purity that has helped in a big way. People have started diversifying and moving into a monetary material that is gold and to an excellent silver.

That has changed quite significantly over the last couple of years. I’ll come to that a little later, but this was a fundamental change. Then you have event of ETS, which was a game changer for the industry. Central banks, who were the net sellers. That’s a major part of why I feel gold is where it is right now, and it’s rocking. It’s making all time high. It’s time and again is because one of the major drivers is the Central bank. That’s one thing. Third thing which probably you’ve not asked, but let me try to answer that is, now the next shift is coming is making gold productive.

That is something which is very surprising because over the last 20 years, I heard so many experts talk about gold as a non-productive asset. If you can turn that around, which I believe has happened, and with Monetary Metals doing that, and when I was talking to the founder, Keith, I was super surprised and super taken aback that I didn’t know about this particular concept. That, I think, is the next big change that’s coming. Overall, there is a tectonic shift. What I mean by that is it’s not a one-time, one-off event. It’s going to change the way gold is treated.

So all the small, small little things have changed the way gold functions. From gold bearing just the monumental value, now it has become a monetary metal.

For centuries it was a monetary metal. It became an monumental value because of whatever happened. We can discuss about that a little later on. But then again, it started acting like a monetary metal. So that shift has happened, and I was lucky enough to see the transition, and that really fascinates me.

Monetary Metals:

And, Hiren, what’s so interesting is that this is a perfect storm in terms of gold and silver. Obviously, there’s been lots of gold and silver jewelry throughout decades and There’s been gold ETFs as investments, but they’ve been similar to stocks, trying to trade them in and out. But now there’s this new monetary demand. There’s this debasement trade. There’s all this inflation across the globe.

And suddenly, people are thinking about alternative currencies, alternative monies, and really thinking about what it means to hold a money balance. What are assets? What are investments? What are money? What are currency? And now we’re seeing gold and silver hitting all time highs.

How much do you think is that story due to monetary demand versus something else?

Hiren Chandaria:

That’s a very loaded question. Let me try to answer that by giving you a little bit of context in terms of how I look at gold and what has happened. Where the total gold mine till date, what is the quantum of that? Very Is it parked? And what is happening in each particular sector?

That might be a little longer answer than a short answer. But let me give you a little story. I used to hate history. I used to hate history. Then when I was talking to one of my friends who is a writer and was written a couple of books, he gave a very interesting anecdote. He said that history gives us a perspective of where we are on basis of what it was.

That in a way help us to understand or get a little idea of what future might hold. Nobody knows what future holds, but it can give a little bit of sense of where things are moving. From that perspective, let me dig down to the numbers for gold. If you look at it, as you already pointed out, jewelry has been the backbone of gold markets, and that we constitute total gold mine till date is around $30 trillion.

I repeat, it’s $30 trillion. If you put that in the context of the global debt markets and equity markets, the numbers range from anywhere between $250,000, $300, $350 odd trillion. That’s the total quantum. Out of If you look at the investment in bars and coins is around $6. 8 to $7 trillion.

Out of those $300 trillion, $7 trillion is in the investment market. If you think about any portfolio theory, then any diversification of recommended by most of the experts or any of the portfolio market with portfolio theory or sharp ratios or whichever calculations you do, you will end up probably in the range of anywhere between 5% to 10%, more likely 7. 5% and above.

That is the we are looking at. But imagine that is the things which we want. Now, going in a little segue, If you look at it, the gold mine supply has increased by around 1. 3% annualized over the last 10 years. It’s not likely to go up suddenly. Obviously, there would be more metal coming into the market because of the all in sustainability cost. If you look at it, it’s around 1,600, 1,000. Mines are making excellent profits right now, and there will be a lot of supply which is sitting on the sidelines which would come.

But the new mine supply, which could be the game changer, is not likely to come for next 6-10 years. That’s not likely to happen. How do we look at it? How do we take a call on gold from a long-term perspective? If you think the demand is going to increase by more than 2. 5% roughly, then we are in deficit. If that is happening, then gold prices should move a little higher.

That is one way of looking at it. Now, all of this 30 trillion, 13. 5 trillion lies in jewelry, just in jewelry. Now, this is a very, very peculiar thing you would notice about any of the metals. I mean, none of the metals have this particular The total gold, mine till date, it’s still lying there. It’s lying in some form or the other. It’s not perishable. It’s not consumable. Copper, you consume it.

It goes away. But gold does not go away. So this 30 trillion are there, but they are sitting in different forms. Over the last 10 years, the change in jewelry has been to the tune of 10%, only 10% increase in the jewelry demand. So there is a tectonic shift here.

Things are changing. First, it was always and always only jewelry, but now it’s moving away. Even if you look at jewelry, it’s very interesting to understand that most of the people do not swell jewelry. Almost never. When it’s the one-way street, whatever comes in, it’s consumed, and it’s getting consumed, it’s getting consumed, it’s getting consumed.

Yes, I do agree, and I do understand that whenever Whenever prices rise, the jewelry demand goes down a little. You asked me about India, right? Let me give an example. If you draw a chart of Indian jewelry demand vis-a-vis the gold prices, you will see that at almost each of the price drop, the jewelry demand in India would shoot up at each of.

I mean, Indians are very, very price sensitive, and they support a gold price in a major way. Suddenly, after that one or two quarters of jewelry demand increases, ideally one quarter, you will see the gold price spiking up again. It provides an amazing flow. If you talk to anybody, almost anybody in the countries like India, China, Turkey, you won’t see people selling gold because prices have gone up. That does not happen.

It’s a one-way consumption. Over Over the period, I had the privilege of talking to many, many, many gold owners, generally buyers, and you can’t argue with them. They want to buy it. It’s like a priced status symbol. Which they want to have. It’s non-negotiable. Every marriage that happens, there is a jewelry bought. Every religious festivals, there is a jewelry bought.

That is super interesting. That’s about jewelry. Jewelry demand constitutes currently, was constituting, say 10 years back in 2014, it was around 50% of the overall demand was jewelry. Today, it’s around 45% of the demand. Is in jewelry, total, annually. And that is not going to go away. It might taper off a little, but it’s not going to go away. The jewelry is not likely to come back to the market.

That’s point number one. Now, this is It’s all about jewelry. Now, the second most important factor, and which you touched upon, is its value as a monetary metals. Now, let’s look at what is happening there. And again, going back into history, sorry, if it’s a little long, but I think that’s very important to understand here. As we may recollect that in 1971, President Nixon came in and abolished gold standards.

What happened there? Before Before 1971, every currency which was printed, a dollar which was printed, was backed by gold. Now, suddenly there was a realization amongst people or there was a thing that we have printed more currency than we have gold for. It was packed as $35 an ounce or so. France wanted that gold back. That was the deal. There were two options, either to debase the currency, reduce the flow of currency, or to abolish the standard.

That’s what President Nixon decided to do. That is what happened then. Since then, gold prices have fluctuated up and down. I’m not getting into too much of history because that would bore people and may not add a lot of value here. But then suddenly what happened is gold prices were tapering off and European Central Banks were selling gold. They came out with something called as European Gold Sales Agreement.

That capped the amount of gold you can sell per year, all cumulative put together. That moved between September 1999 until 2019. This Central Bank’s Gold Sales Agreement was there. Now, the beauty of this thing was that every time a Central Bank had to sell gold, everybody was aware before the event that a Central Bank is going to sell gold.

I imagine what would happen. The The largest supplier of gold is talking about, I’m going to sell gold on X date or in so many days. So the price would always, almost always be under pressure. So that used to happen. And that happened for quite a long time.

But suddenly what happened is that 400, 500 tons of gold which was sold by central bank house, now it’s around 1,000 tons of gold which is bought. So if this is zero, there was 400 being sold, and now it’s 1,000 more added in central banks around the world per year.

That’s a delta of 1,500 odd tons per year. That has happened over last 25 years or so. These central banks, why are they buying gold? They are buying gold because they want to move away from currency debasement. They want to move away to an extent from fiat currencies like dollar.

For example, 10 years back, the dollar constituted around 53% of the overall forex reserves of all combined central banks. Today, That’s around 46%. The highest still, the highest composite of forex reserves is dollar, followed by gold, then it’s followed by Euro. Gold has taken over.

With the rising prices, I won’t be surprised if it has gone up a little further than I last calculated. That is what is happening. Now, look at where most of the central banks are holding gold and why they are holding. If you look at US, 70%, 75% plus of their reserves are parked in gold because they don’t want to invest in any other currency and support that currency.

Similarly, Europe put together, most of the European nations, barring probably UK and a few others, 60% plus of their reserves are parked in gold because they also want to support Euro and they don’t want to support other currencies. There’s no alternative, so that’s why they do it. But who are the world’s major economies right now?

BRICS, Brazil, India, Russia, China, which are doing quite well, and their reserves are not significantly higher. If you look at it, India is around 15%, China is around 7. 7%. If China alone wants to increase its result up to the tune of 10%, then they would eat away a couple of years of mine supply. That’s the thing which is happening. Russia has significantly increases gold reserves. Why are they increasing?

Think of it logically. What happened in Russia? I’m not getting into the politics of what happened in Russia and what they are doing. But think of it this way, that they have given their power away of their forex reserves to some other government who can arm twist them at any point of time.

That is not what they are looking for. They don’t want to move away from dollar or from any other currencies, and they want to move into gold. That is one of the major drivers of the gold prices. Most of the Asian economies would slowly and gradually start increasing or has significantly increased gold and would They continue increasing the Forex reserves and park them in gold. That is something which is happening, and that’s a major driver for the gold prices. This was the second point.

That was Central Bank. Now, the other thing which is super interesting and which has really, really changed the dynamics of gold market is investment demand. The investment demand can be in terms of bars, coins or ETFs. Now, ETFs, I know we like to club every ETF together, but the way ETFs are traded compared to bars and coins is different.

There are different fundamentals and different Dynamics. So generally, there is a lot of price to be paid when you buy and sell coins and bars. So this is a sticky. If you buy it, you do not immediately sell it if prices go up. So generally, what I observed is, bars and coins are sticky.

Demand can go up and down, but there’s not this… The bars and coins people hold, it’s likely to come into the market. That’s something interesting to know. Again, if we look at the ETFs, there is a difference between ETFs when we are talking to the Western world and when you are talking to the Asian markets. So majority, around 80% of ETFs are held by US Europe, which can come back to the market.

They are like, okay, this is an investment call. They look at this as a monetary asset. But if you look at the investment demand in ETFs in countries like India and countries like China, out of the total ETF markets, I think around 2. 5% lies in India and around 6 plus lies in China. Just everything else is almost in the Western nation.

So these are not likely to come in in the market. We need to change, I mean, think of it from that fashion. I think investment demand is also shaping up very, very well. India, China together constitute around 400 to 600 tons of bars and coins per year. That is likely to go up. I think there was a little bit of trapping off, but of what I’m hearing from the market, people have digested the fact that gold prices are going to remain high and they have started buying again.

There was a little bit of lore before, again, the demand started coming in. That is it. If you look at last 10 years, the ETF, the total ETF, quantum AUM of ETF, that is the terms held by ETF, has gone up by 88%. Central Bank has increased their holdings by 21%.

So these are not small things. And when central banks do something, we need to listen because they are not going to change. Even If prices are going down, they’ll keep selling, they’ll keep selling. That was happening. Now, if the prices are going up, they’ll keep buying. I don’t know how long they are going to continue.

But in my opinion, that is likely to be the case. Last thing in the gold terms, demand side, if I look at it, it’s the technology demand. The demand in technology is likely to remain stagnant. I don’t see many things happening there.

Gold works amazingly well when you need almost 100% connectivity assurance. For example, airplane engines, spacecraft there, where it has to be in a miniature, the minutest component, which gives you almost 100% surety that it’s going to conduct. It’s not going to rust, it’s not going to do anything else, and it is going to function the way it has to function. It’s such electric applications with sustainably coming in EVs everywhere.

Gold is required. That’s interesting. I don’t see much change happening there. I don’t think many substitutes would come into play, even if the prices go up, but it’s going to be a slow, gradual demand which is going on. That’s my take. 13. 5 tons in salary, 5. 2 Sorry, 13. 5 trillion in jewelry, 5. 2 trillion in central banks, 6. 8 trillion in investment, and remaining around 4, 5% in other places we don’t know.

Monetary Metals:

So, Hiren, I want to ask you now, because of these drivers that you mentioned, there’s, of course, There’s jewelry, there’s investment demand, there’s central banks, there’s, of course, some manufacturing as well. Let’s talk about silver, because clearly the drivers for silver are quite different.

It’s still considered a monetary metal, but it has a lot more industrial uses where gold may be doesn’t. Central banks don’t really purchase silver or don’t officially purchase silver.

And the investment case for silver versus gold is quite different. And of course, silver jewelry versus gold jewelry is quite different. So talk about the drivers when it comes to the silver price, which, of course, has had a banner year in 2025 and an incredible year so far in 2026.

Hiren Chandaria:

Silver is a very interesting commodity. There are two ways of describing silver, in my opinion. It’s a high octane gold. That’s one way, and it’s a poor man’s gold. It’s the other way. Why I say poor man’s gold is because gold has reasoned up so high, and effectively, it’s an expensive commodity. Many people are not able to buy gold, so they move to silver.

That’s in terms of the demand for as an monumental value. That’s happening. That’s just driven up silver prices because even gold is gone now. It’s a monetary asset. Yes, it is, but it is more of an industrial asset. Silver prices do increase because its demand is going up. The EV market is going up. Though there might be a little bit of deep and high electronic vehicle demand, but overall the trajectory is clear.

As we move towards sustainability, silver is going to go up. Silver’s demand, industrial usage is very, very, very crucial. There are many applications for that, and all of that is very, very positive for silver. Silver has two roles, monetary matters and industrial commodities, and both of them are going up. In terms of the supply, again, it’s very interesting.

Most of the silver that’s coming into the market is coming as a secondary mine supply. There are no primary silver mines, big mines as such. Most of the silver which is coming into the market is secondary. So only and only if copper or any of the metals along with which silver is coming out, if Their mine supply goes up, then silver comes out. So that’s the second aspect.

Silver is a much smaller market compared to gold. And both of the things, generally, you’ll see either its monetary value is playing or its industry value is playing. But there are rare instances where both are very positive, the demand is going up, and the environment is very conducive. That being said, silver is like a leverage play on gold, a high octane gold.

So even if you see a correction, it might be a very, very steep correction. So the risks are high and rewards are much higher.

Monetary Metals:

Hiren, thank you for the fascinating deep dive on both gold and silver. I want to do a section that we do as a rapid fire section in the middle of our interview. So I’ll ask you questions from all over the map. You can answer as quick or as short as you want, or you can answer as long as you’d like as well.

So first, I want to start with silver versus gold. Obviously, last year in 2025, silver outperformed gold, and this year, silver is, of course, hitting more all-time highs, as is gold. In your opinion, for an outlook for 2026, which do you see outperforming, gold or silver?

Hiren Chandaria:

The answer truly depends on so many factors. It’s not pure play whether you want to invest in gold or you want to invest in silver. My question is, if I’m advising anybody, which I am not right now, if I’m advising anybody, my first question would be, what is the current portfolio constitution?

Where is your money parked? Whether it’s only US, whether it’s Western economies, what percentage is going to India, what percentage is going to China, what is your sectorial allocation, which industries are you focusing on, what’s your allocation to mines and metals.

Then we do some modeling and identify what percentage should go into silver and what percentage should go in gold. But that being said, I think would outperform gold if the trend continues continues.

But as you and me both know, no trend continues forever. There might be a correction. I don’t know when, but that correction, in my opinion, would be short-lived. If I were to bet, I would say I would put 50/50 on both of them, gold and silver, because monetary value of gold is not going to go away. Monetary value of silver is not going to go away.

Industrial application is not going to go away. There might be tactical market corrections, profit booking, which would drive down silver prices and gold prices, but I don’t think so they are going to be long-lived.

Monetary Metals:

Next rapid fire question for you. Let’s talk about central banks. Central banks have historically never really purchased or held silver. Do you think that will change in the future?

As silver prices go higher, and B, of course, as the monetary metals gold and silver, there’s maybe an opportunity to still get that monetary flavor, but at a lower price point. So do you think central banks will add silver to their reserves and not just gold?

Hiren Chandaria:

I don’t That’s likely to happen. There might be one or two instances of here and there, but I think majorly gold would have that privilege of being part of the central bank’s ecosystem.

Monetary Metals:

Next one for you, Hiren. Let’s talk about some of the major gold markets globally, which is, of course, India, Turkey, and China. What are the main differences you see between those gold markets? Obviously, they all have a cultural affinity towards gold, not only as an investment, but as money and as jewelry. What is the main difference between somewhere like India, China, and Turkey, which are the major global gold markets.

Hiren Chandaria:

Okay, so India imports a lot of gold. The price is very transparent, and there are various mechanisms to buy gold. That’s India. China, if you look at per capita consumption of Hong Kong versus China, you will see a difference.

When you go to Hong Kong, you’ll see a lot of buyers from China coming there and buying gold. That’s very It’s interesting. It’s not very easy to buy a lot of gold in China. That’s second. Setting up companies out there and trading in gold is a different story.

But for a retail investor, that’s the situation in China. Turkey is, again, a very interesting market. They have a lot of affination for gold. They have gold metal accounts. They’re where you can open an account with a bank in terms of grammage. So such things are still not present in India. I don’t think so they are present in China.

Turkey is much more advanced in that sense, but it’s a much smaller market compared to India and China. And they are not… They will They are very sophisticated instruments available in countries like India and countries like China. So they are different markets, I would say.

But overall, I’ll say they are more similar from a Western point of view. They are much more similar than Then we can argue.

Monetary Metals:

Hiren, next rapid fire question for you. We’ve seen some really interesting silver and gold products, whether it’s gold-denominated bank accounts in Turkey or silver loans being able to be taken out in places like India.

What are some of the products or services in these other countries around the globe that you think the West hasn’t caught up to yet?

Hiren Chandaria:

I think it’s to do with what the demand for the market is. You might have the best product, but if people are not used to using that in that fashion, then it does not work.

I think there are many good products, and I think there would be a time when we would have much sophisticated available options for retail investors in gold, silver, precious metals, or whatever. But that’s going to come.

Monetary Metals:

Hiren, a lot of the times we talk about a one-way street when it comes to gold purchases and really no gold selling. China is often thought of as a one-way street.

Gold is mined in the country but never really sold or exported. India, of course, there’s jewelry demand and gold demand, but it never really leaves the country. Same with Turkey. So what do you think about this one-way street analogy and what would cause it to become a two-way street where these major gold buyers become major gold sellers?

Hiren Chandaria:

I think that’s not likely to happen in a foreseeable future. I’m not saying never, but I think in a foreseeable I don’t think so, it’s likely to happen. The primary reason is that currency debasement is likely to continue. If I have to ask somebody what’s their view on currency debasement, do you think that’s going to go Where balance sheets are going to stop expanding.

I don’t think so that’s likely to happen. So till that point of time, I think this phenomena is not likely to change. But the factors are different why it would be a one-way street. There are some changes which are happening. For example, the younger generation do not like as… I mean, they have not so much of affination towards gold, jewelry, as the older generation used to have, but that is substituted by demand and bars, coins, ETS.

The demand has changes the way people buy gold, but it’s almost there. The liking for gold, definition for gold is still very much there, and it’s not likely to go away or force you in the future. After 10, 15 years, we can have another podcast. But as of now, it doesn’t seem likely.

Monetary Metals:

Hiren, what about this swapping or substitution between gold and silver in the Indian market? A lot of people said, Oh, during Diwali, there was silver buying rather than gold purchasing.

How much do you think that substitution between gold and silver matters in the Indian market, or are there other factors at our play that are more important?

Hiren Chandaria:

Okay, now this brings a very interesting conversation. If you look at jewelry demand in India, for example, if the first child in the family has got X ounces of gold for his marriage, the second child gets the same ounces of gold, or there is an equation between the two.

So irrespective of the prices, that happens. That’s very interesting. But what I’m trying to say is even if gold price double, triple, then there is very little of that equation likely to change. It’s going to change. It’s going to change.

A few people will do that, but majority of them won’t. That’s one thing. Second is there is a purchase which is impulsive or paying tribute to the occasion. What I mean by that is there are a couple of days. For example, there’s Chinese New Year, there’s Aksha Tritia in India, or Dhanterras, which are supposed to be or which are very auspicial times to buy gold or silver. If the gold prices are worn up and if I have the option, I might substitute it for silver. Currently, during the Diwali period, I was in India. I was fortunate enough to be in India at that point of time.

Every person in the precious metal market whom I spoke to was just asking one thing, Can you get a silver delivered before Diwali? That was the only thing. There was a lot of substitution which was happening because it was religious and not marriage-related.

It depends on what context it is and what price rise have happened and what is the current team in the market, what people are pushing, what the experts are telling about gold, silver, and what is the general perception. It’s a little complex, but I think there is some amount of substitution which has taken place. But I don’t think so gold is going to go away or silver is going to surpass gold. That’s unlikely to happen.

Monetary Metals:

Hiren, I want to ask you about a question that’s been in my mind for a while about Turkey, India, and of course, China, which is that the worse their economies do, the more that people in those countries look for safe haven assets, whether it’s to get away from the the Chinese real estate market, or to get out of the Rupee, they maybe look for gold or silver as monetary safe havens where they can park their money and know that it’s going to stay money rather than be devalued.

But on the other hand, when their economies grow, whether it’s China or India or Turkey and things are looking up, there’s actually more money or more currency to buy gold and to buy silver. So if these economies do well, is that better or worse for gold and silver than if they do poorly?

Hiren Chandaria:

I would say it’s… See, what is happening in this economy? This economy are in middle income, high income or group. High middle income or low middle income. India is a low middle income group. There a lot of population is moving from below the poverty line to above the poverty line to a decent standard of living.

When that is happening, they are getting more money as a disposable income. Now, when the disposable income is higher, obviously Basically, they are going to look to A, maintain that, and B, improve that. In both these cases, there is some amount of allocation which happens in goals. That’s why demand keeps increasing. But I think when markets perform better and when economies are growing, the demand is likely to go up.

On the second stage, I think it’s very peculiar because when markets are not going to do well for For a short period of time, that is a time when people are a little about it and they back off from purchasing gold. But if that’s likely to continue and if they have money left, they would park their money in gold and silver. I think gold demand is likely to go up more when economies are doing better, and it’s not likely to go up so much when economies are not doing that well.

Again, if you look at it globally, the other phenomenon which is happening is when economies do better because of expanding balance sheet, monetization, and lose money policies, inequalities are increasing. If inequalities increase, It’s going to lead to people who have money to get more money, and that has a different connotation for gold and silver prices, the pattern in which they buy gold and silver changes.

Monetary Metals:

Hiren, now I want to ask you some of the markers that you use. You’ve been quoted recently in the Washington Post right before Silver’s massive price surge, talking about how you thought silver was going to go higher.

You’ve been quoted in CBS Money Watch, again, on gold, silver, platinum, and palladium. You’re really an expert when it comes to the precious metals, what are some of the markers or indicators that you use, whether it’s for prices being bullish or for being bearish?

Hiren Chandaria:

It’s a sum total of everything. It’s A is interest rates, real interest rates, macroeconomic environment. You look at geopolitical situations, inflation, the fundamentals of underlying commodities, How the investment demand is shaping up. Overall, what are the alternatives available where people can make more money? What is the stability?

What is the working age population? How their income is growing? So a gamut of things. But if I have to put top two, three, real interest rate, geopolitical tensions, these are the two main things and the way economy is doing the third one. These are the three main things which I would look at.

Monetary Metals:

Hiren, last question for you in this rapid fire section. It is about the Federal Reserve. Obviously, in the United States, the Federal Reserve has seen increasing pressure from the President to basically bend the knee to lower interest rates. But Of course, in the rest of the world, there’s been lowered interest rates. They’ve already had a politicized central bank.

So how much do you think the central bank matters, especially the United States central bank? And when they do or if they do lower interest rates, how much do you think that’s going to matter to gold and silver prices?

Hiren Chandaria:

The theoretical answer is it’s going to matter very much. Why? Because the opportunity cost of holding gold and silver goes down when interest rates go down, and that leads to higher gold and silver prices. What I mean by that is if you’re getting 4% on the money parked in the bank, then automatically gold becomes less attractive when you only get, say, 2% when money is parked in the bank.

That is one of the reasons. I think that’s going to matter, but I don’t think so Fed rates would matter, but the real interest rates and real inflation would have a much bigger play there.

That’s going to result in higher gold prices. You would have seen the asset price inflation happening right now because of lose monetary policy, quantitative easing. So balance sheets have expanded. There is no way to get that money out of the system yet. Obviously, there have been attempts and there’s some amount of work being done, but that’s not likely to happen over a short period of time or a medium period. That’s going to result in demand for gold, silver remaining high from that perspective.

Monetary Metals:

Hiren, I want to ask you about these different gold markets because they have different affinities or different perspectives on gold. Some see gold as money, some see gold as an investment, some see gold as a safe haven, a store of value, some see it as jewelry.

Walk us through, whether it’s India, whether it’s Turkey, whether it’s Singapore, whether it’s China, how do these different economies see gold?

Hiren Chandaria:

Okay, so if you look at the bulk capital Per capita consumption of gold, one of the highest per capita consumption is from Middle East, Kuwait, Dubai. That’s very interesting. These people hold a lot of gold. I don’t know if this number’s due justice, to be honest.

I think the per capita number should be way higher. Because gold has been bought for the last 5,000 years, even before the financial markets or any of this thing came, the data collection and everything came into play. Nobody knows what quantum of gold is being held. That gold is lying there. If the gold is lying there, I’m taking a risk by keeping it at my home or keeping it somewhere unlike banks. If I’m putting it in banks, I’m incurring a cost.

Instead of that, if I’m able to monetize in a safe way, a reasonably safe way, then I think I got a winner because gold is already there. If I can increase their increase the quantum of gold which I hold without worrying about storage, without incurring the cost for holding it, then I think it’s an interesting proposal we are making. That’s what I feel. I’m very bullish on this product as such.

Monetary Metals:

Hiren, I also want to ask you about some other gold products that have failed in the past. Most notably in India, there was a gold monetization scheme offered by the government. And a couple of years ago, they said, No más, no more.

We can no longer offer this gold monetization monetization scheme. Now, people in India, retail investors, citizens of India, love the gold monetization scheme. But for the government, it wasn’t practical and it wasn’t sustainable.

So talk a bit about the public or government-sponsored gold products like the gold monetization scheme, which ultimately failed.

Hiren Chandaria:

See, if we are trying to capitalize on gold jewelry and expect people to monetize that, it’s a very, very strong uphill battle to climb because of primary reasons.

There are so many reasons to it, but let me give you one example. I bought a jewelry from my known jeweler 30 years back, and he has sold me, telling that it’s 22 carat gold. Okay, that is 22 is nothing by 22 by 24.

That is 916. 67 ounces of gold. That is the value. But if it’s not 22, but it’s a 18 carat, what he has actually sold me, then the government is not going to give me 22 carat for that. That creates a lot of friction.

Government When the government came out, in fact, I’m aware of all the final details that how your gold would be essayed and stuff. But instead of that, if I go to the same jeweler, I’m likely to get much more than what the government is paying because a jeweler has given me the same thing and he needs to maintain his reputation. That is one of the reasons why it didn’t go well. But if we are targeting gold, bars, coins, the physical gold, which is in medallion, it’s in coin, bars, which is with the purities, almost assured.

Then I think it’s a big win. That demand is quite significant as well. The quantum of gold lying in bars, coins, it’s quite significant. If you’re able to capitalize on that, it’s a big win.

Monetary Metals:

Hiren, I always ask as my final question, what’s a question I should be asking all future guests of the Gold Exchange podcast?

Hiren Chandaria:

If you should ask them, what is your current composition? How much gold you are holding?

Monetary Metals:

All right, Hiren, I turn the question around on you. In your portfolio, what % is gold and maybe what % is silver?

Hiren Chandaria:

I would say around 40% of my portfolio is parked in gold, but that includes physical gold as If I don’t include real estate, I say. Silver would be close to 5%.

Monetary Metals:

Hiren, it has been fascinating interviewing you. We’ve learned a lot about the Indian gold market, the Chinese gold market, the Turkish gold market. We’ve, of course, talked about gold versus silver.

We’ve talked about the Federal Reserve. We’ve given your macro outlook. Are there any questions or any answers that you want to give that we haven’t touched on that you think are important?

Hiren Chandaria:

Yeah, one of the things, okay, one of the things which I feel is, see, I think it’s very important to mention that if, for example, if today markets do not perform well and markets correct.

And I’m talking on financial markets, every market. At that moment of time, gold is a very, very peculiar characteristics. And it’s like at the start of a bear run, I repeat, at the start of the bear run, gold prices This is tend to correct. And there is a reason for that, but that almost always happens. And then it goes up even more. But it starts when every market is going down, it starts going down, and then it goes up. That’s very significant.

Why does that happen? That happens because imagine if you are a big bank or big trader, global trader, and if your stop losses are hit because some market have hit the stop loss at some point of time, it has a spiraling effect, and you exit all your positions around the world at that point of time. If you’re existing all the positions, you also move out of gold. That leads to lower gold prices, and that leads to other Stop Losses, the bigger player, bigger player, bigger player.

It keeps on moving and it creates Stop Loss. People exit all the positions. Once they do that, then they again rebalance and then look at what are the factors, what happened, why it happened. And that is the time gold allocation tends to move higher. So that’s a very peculiar thing which happens. Every correction, it goes down and goes up. And second thing, what I would say is People are mesmerized by gold-silver ratio. People are mesmerized by correlation with various classes.

I would not read too much into it because if you look at the overall correlation numbers, it does not add a lot of value. But if you take into example that what has happened during the last deflationary environment when such factors were there, at that point of time, what was the correlation of gold vis-a-vis financial assets? Then you get a little bit of sense.

That’s very, very important to get into the depth of things, which generally is not done, and they are said loosely. Second is gold-silver ratio. I’m not at all a big fan of gold-silver ratio. The factors which affect gold prices do not affect silver prices in the same fashion because industry is metal.

Silver is also industry matters. It’s a much smaller market. It would have a much leverage impact. It’s basically industry is metal, and it’s influenced by other factors as well. I am not very big fan of both of this.

Monetary Metals:

Hiren, so incredible and always so fascinating getting to talk to you. Hiren, thanks so much.

Hiren Chandaria:

Thank you, Ben. Really lovely talking to you. Great. Have a good day.