“Gold has proven to be a great international investment, and it is somewhat of a diversifier,” Larry Fink, 73, told The Economic Times earlier. “But you’re not growing with India. You’re just growing with basically the fears of the world,” Fink said, noting that the recent rally in gold has been driven by all the fears and the debasement of currencies. He clarified that he was not by any means suggesting gold is a bad investment, adding that gold has a different parameter over the long run.
Fink emphasised that gold operates independently of domestic economic growth. Gold is independent of India. “In fact, when you invest in gold, you actually hurt the Indian economy, because once you invest in gold, there’s no monetary effect to it. It’s an asset that is unaffected by the economy. So when you invest in gold, you’re actually taking money out of the economy,” he said.
Turning to long-term wealth creation, Fink expressed a stronger conviction in equities tied to India’s growth story. “I’m pretty confident that the Indian equity market over the next 20 years is going to double and triple and quadruple”. He doesn’t see gold moving that way, while acknowledging the strong past performance of the metal. “Gold obviously moved from $2000 to $5,000, and so, at this moment of time, he says investors can all relish what gold has done.
Still, he stopped short of dismissing traditional investment instincts. “But you know what… I don’t want to dispel grandmother’s wisdom. Can’t compete with that!” he said.
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In a broader conversation, Fink underscored the need for India to deepen its capital markets so that domestic investors can participate more fully in the country’s growth. He said stronger local participation would reduce reliance on foreign inflows and allow Indians to benefit from an economy that has the potential to expand at 6-10% over the next decade.He described India as being at the cutting edge of financial infrastructure, highlighting developments from digital payments to the future tokenisation of financial assets. Fink also dismissed concerns about an AI bubble, arguing that demand for compute currently exceeds supply and warning that the bigger risk is underinvestment, particularly in the US amid rapid technological advances in China.
On capital flows and currency trends, Fink said trade agreements could help lay the groundwork for more inflows. “You saw the rupee rally quite a bit since that. There was some fear about where India was going. The rupee devalued 12% or so over time, but it’s now rebounded quite considerably,” he said.
The BlackRock CEO said the company is actively scouting for long-term opportunities in India. “We are looking for investment opportunities here. We’re looking to invest side by side with partners. We believe there are tremendous opportunities to invest for the long run,” Fink said, noting that investors from Southeast Asia, the Middle East and Europe are also showing interest in the country.
(Disclaimer: The recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of The Economic Times.)