India’s oil shift may be overstated; metals outlook remains strong: Lyn Alden

Investors should remain skeptical about the near-term material impact of a potential shift in India's oil import policy, advises Lyn Alden, Founder of Lyn Alden Investment Strategy, while expressing a structurally bullish long-term outlook on precious metals.

Commenting on the recent high-level talks between India and the US, and the suggestion that India will rebalance its oil imports away from Russia, Alden urged caution. "So far, the history that we have seen throughout this year is that optical wins have generally been more important than substantive wins," she stated.

While acknowledging that the thawing of relations is positive, she believes it is possible to reach an understanding that scores political points without leading to significant, large-scale changes in India's energy policy. Her base case is that a review six months from now might reveal fewer material changes than are currently being advertised.

On the subject of commodities, particularly precious metals, Alden outlined a view differentiated by timeframe. For the long term, looking out over the next five years, she believes metals have "longer to run." She attributes this to a "very strong structural change in global reserve policy" and shifts surrounding the US dollar. "I think when we look back at say 2030, gold could be an outperformer," she said.

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However, in the near term, she feels the rally is overextended. "I do think it's ahead of itself currently," Alden said, predicting that the market is due for a "substantial pullback or correction" in the coming months. She clarified that she would be a buyer once that correction clears some of the excess froth.

Regarding silver and platinum, she views their recent catch-up rally as a healthy broadening of the market but expects them to become similarly overbought. For traders, her advice is to "start getting cautious at these levels" and consider taking some profit or rebalancing, even if the long-term fundamentals remain attractive.

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For the entire interview, watch the accompanying video

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