$4,400 Isn't the Peak for Gold ?🚀

Today’s Market Update

Surprisingly, it hasn’t been a bad month at all. Even though the last couple of sessions were in the red, October still managed to close over 5% higher. That’s quite rare, and when we look at the month as a whole, it has turned out to be decent.

FIIs have also pumped in nearly 2 billion dollars this month after a long time, which is another positive sign. So, despite the recent dullness, October wasn’t bad overall.

There was an important update from SEBI today. Bank Nifty is going through a restructuring. Until now, it had 12 constituents, but now the number will go up to 14. The maximum weight for each stock, which was earlier 33%, will now be capped at 20%. This means heavyweights like HDFC Bank, ICICI Bank, and SBI will no longer dominate the index beyond that limit. Their combined weight will come down from 62% to 45%.

Because of this change, many funds — including Bank Nifty funds, arbitrage funds, and others tracking the index — will have to reduce exposure to these three and add some new ones, possibly Yes Bank, Indian Bank, Union Bank, and Bank of India.

• Markets, however, have been nervous lately. After the recent fall, they seem to be looking for support.

• For the day, Nifty was down 0.6%, Nifty Junior fell 0.37%, Midcaps slipped 0.49%, Smallcaps dropped 0.56%, and Bank Nifty declined 0.44%.

• Gold remained flat, down 0.21%, while silver gained slightly by 0.17%.

• Both metals have corrected a bit and now depend on the market’s mood to see if they can challenge previous highs again.

Other Market Triggers

• In the market breadth, advances fell through the day while declines kept rising, leading to losses in several major stocks like Cipla, Hindalco, Adani Group stocks, Kotak Bank, HDFC Bank, and ICICI Bank.

• Bharti Airtel, Bharat Electronics, and Eicher Motors stood out positively in the Nifty.

• In the Nifty Next 50, United Spirits, PSU banks like PNB, Canara Bank, and Bank of Baroda did well. Lodha and Adani Insul also gained, while DLF fell after its results.

• The star performer of the day was Naveen Fluorine International, which surged 14.28% with heavy volumes. The reason behind the move isn’t clear yet, but it made a strong new high.

U.S. Market Update

• In the U.S. markets, it was a rough day as well — the S&P 500 dropped 1%, Nasdaq was down over 1.5%, Meta fell 11%, Altria lost 8%, Oracle and Boeing each dropped around 6%, and CVS Health was down 5%.

What to watch next ?

• The adjustments in Bank Nifty will happen gradually in four stages until March 2026, with the first phase starting in December 2025.

• This move should help reduce the volatility that Bank Nifty often faces due to its concentrated structure.

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What To Read This Week ?

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The Gold Standard Revival: Why Central Bank Demand Suggests $4,400 Isn't the Peak 🚀

The 300-Pound Gorilla is Buying 🦍

The most compelling driver in the gold market today is the seemingly insatiable demand from global central banks. This consistent, non-speculative buying represents a "permanent demand" that acts as a powerful, multi-year tailwind for the metal's price. Current data shows that the central bank gold share of world reserve holdings (outside the US) has been steadily climbing.

Here are the key metrics illustrating this institutional shift:

• Central Banks have been accumulating gold at a clip of approximately 1,000 tons every year for the last three to four years.

• The gold share of reserves is currently around 23% to 24%.

• This figure remains far below historical averages, which were more than 40% before 1990 and peaked at nearly 70% during the 1980 gold peak. The gap between the current percentage and historical norms suggests significant room for further accumulation.

A Tidal Wave of Untapped Private Wealth Looms 💰

While central bank demand is the "gorilla," the potential shift in private portfolio allocation represents a colossal, untapped market that could dwarf the institutional buying. The current narrative of gold being "overbought" ignores the sheer size of the private wealth market.

The implications of a mere fractional increase in gold allocation are staggering:

• Institutional Recommendation: Major financial institutions, such as Morgan Stanley, have suggested investors allocate as much as 20% of their portfolios to gold.

• Current Reality: The average gold holding in a global private portfolio is a minuscule 1.5%.

• Market Implication: Given the global private portfolio market size of an estimated $350 trillion, a shift from 1.5% to the recommended 20% would require an influx of approximately $50 trillion into gold.

• Supply Constraint: This demand must be absorbed by the global supply of all above-ground mined gold, which has a current market cap of only $30 trillion. This massive disconnect between potential demand and available supply indicates a potentially explosive scenario for gold prices.

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