Jayant Manglik, Head-Commodities, Religare Commodities said crude is a buy in fundamental terms. Manglik expects crude to touch USD 128 per barrel within a month.

He added that with the dollar not showing any sustained strength we continue to put a buy on gold. A target of about USD 897 per oz is something we could look forward to in the not very far off future.

Excerpts from CNBC-TV18’s exclusive interview with Jayant Manglik:

Q: What is the call on crude and what’s the target?

A: The target right now would be all technical because in fundamental terms it’s a buy. You have increasing demand from countries like India and China and you have demand which is not impacted at all by high crude prices and in fact leads to concerns about there being insufficient supply during the driving season and summer months in the US which was the real trigger for the immediate rally which happened.

On the supply side, there is Nigeria seeing a big disruption. Russia is also seeing a slowdown in output growth. So, fundamentally it’s strong. So, in terms of a momentum market, play on a buy but it’s a call one would review everyday.   

Q: Your target says USD 125 per barrel. What would be the next target since we are almost pretty close to that target now?

A: We have about USD 128 per barrel in mind within a month. But it is uncharted territory essentially.  Once USD 125 per barrel is crossed, we would take a fresh call looking at the speed of the momentum at which the price is.

Q: Gold is at USD 888 per oz. How would you play that at this point?

A: Gold has been steady mainly due to oil and a weak dollar. Today, we saw the Euro gaining some strength. A lot of financial investments is also going into gold and mainly the money is coming through ETFs.

Apart from that, with the dollar not showing any sustained strength we continue to put a buy on gold. A target of about USD 897 per oz is something we could look forward to in the not very far off future.

Q: The basket of commodities is decreasing but spices are still there and that’s one commodity, especially pepper, where we are seeing a dip in prices after the news from Vietnam. So is that a shorting candidate?

A: That is right. It’s unfortunate that all the biggies are now delisted. We have pepper trading i2n Cochin prices. The volumes have been low and it is just doing about 20-30 tonnes a day and arrivals are there in the last phase in Karnataka. But buyers are not showing any interest at this price level. So, there is a reduced business activity. In general, the market sentiment is weak and it should be trading sideways with a downwards bias. We do have a sell on pepper on for NCDEX June.