Fed rate cuts and dollar fall could spark commodity rally, says Kunal Shah of Nirmal Bang

A sharp depreciation in the US dollar could set off the next big rally in global commodities, according to Kunal Shah, Head of Commodities & Currency Research at Nirmal Bang.

In an interview with CNBC-TV18, Shah said the recent dovish tone from the US Federal Reserve, combined with rising debt pressures, points to a potential policy pivot. “I think the next big move will now come from actions by the Federal Reserve, which will eventually lead to a sharp depreciation in the value of the dollar,” he said.

Shah expects the US dollar index to fall to 93–94 in the next three months. He sees this move being triggered by growing fiscal strain in the US, where the Fed’s debt has already risen from $35 trillion to $37 trillion in just 18 months. “They cannot keep interest rates elevated, irrespective of what happens to inflation,” he said, adding that a 50–75 basis point rate cut is likely in the coming months. “That is going to be very bullish for commodities.”
Among metals, silver remains Shah’s top pick. He pointed out that silver has run a supply deficit of around 8% for three consecutive years, and scrap supplies are also shrinking. “Silver is about to break out and is likely to move up quite fast from here,” he said. Currently trading at around ₹1,06,000 per kg, Shah expects silver to climb to ₹1,15,000–₹1,20,000 in the next two to three months. “One should go long at the present levels,” he added.

On gold, Shah believes the near-term upside is limited as the metal has already priced in a 50-basis-point rate cut. “I’m not particularly bullish on gold,” he said, pegging the maximum upside at $3,500 per ounce. He expects muted central bank buying in 2025, estimating purchases to be 250–300 tonnes lower than the recent average of 1,000 tonnes annually.

Still, Shah sees limited downside risk for gold, with strong support between $3,200 and $3,100 per ounce. “I don’t think it’s going to crash. $3,100 seems to be a reasonable bottom and would be a good level to re-enter long positions—rather than entering now,” he said.

Watch accompanying video for entire conversation.