Zoho founder Sridhar Vembu on Saturday voiced concern over the stability of global financial markets, warning that gold is “flashing a big warning signal” amid rising uncertainty and soaring metal prices.
In a post on X, the founder of the Chennai-based software company said he agreed with former IMF chief economist Gita Gopinath’s recent assessment of the U.S. markets, which highlighted risks emerging from overvaluation and excessive leverage.
“The US stock market is in a clear and massive bubble. The degree of leverage in the system means that we cannot rule out a systemic event like the global financial crisis of 2008-9,” Vembu said.
Noting the movement in gold prices, Vembu added, “I don’t think of gold as an investment, I think of it as insurance against systemic financial risk. Ultimately, finance is all about trust and when debt levels reach this high, trust breaks down.”
Vembu’s comments come amid heightened global market volatility and renewed concerns about economic stability as investors seek safe-haven assets such as gold.
Meanwhile, gold prices are expected to hit the record level of Rs 1.50 lakh per 10-gram level in coming months as it is showing unprecedented momentum in the global and domestic markets bolstered by the central bank purchases and strong public demand, particularly in China and Japan, according to Anantha Padmanaban, founder member and former chairman of the All India Gem & Jewellery Domestic Council (GJC).
"The best I can see is around Rs 1.50 lakh per 10 grams is what I expect unless and until there is a correction nearby," Padmanaban told ANI in an exclusive interaction on Friday, adding that this level could be reached in the coming months if trade talks between China and America fail and the Russia-Ukraine conflict continues.
In India, the spot rate is currently around Rs 1.31 lakh per 10 grams on MCX. Padmanaban also expects a temporary moderation to around Rs 1.15 lakh if there is a short-term correction.
"If you see whenever it peaks, there will be a correction. But when is that peak? That's the question mark today. We thought $ 3,300 (per ounce) is the peak, then $4,000 is the peak. Now $4,500 is very nearby. Anytime tonight, it can also cross $4,500. Now the American bank says $5,000 is their prediction. We don't know. Things are going crazy," he said.
Talking about the factors for higher prices at the global markets, he said "the main reason is that central banks are buying, and now even the public has started buying. Yesterday, I read that in China and Japan, people are going to jewellery stores and purchasing physical gold. So it's at its peak, everyone is going for gold,".
The gold price has gone up by $150 per ounce within 30 hours. The yellow metal never reacted like this in history, he said.
He also highlighted that Indians are holding gold worth trillions of rupees in their households. "India has the highest position of gold we have around, including the public position. It comes to around 25,000 to 30,000 tons. Now today it's going into trillions (rupees). We are not able to calculate it," he said, adding that that's the value of the holdings by all the Indians, and the RBI both put together.
*With Agency Inputs
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
