Brent to test USD125/bbl; buy copper on dips: Anand Rathi

Excerpts from Markets Midday on CNBC-TV18 Watch the full show »

Ritesh Gandhi, senior research analyst, commodity and currency, Anand Rathi Commodities in an interview to CNBC-TV18 shared his outlook on various commodities like crude and copper.

On the domestic front, Gandhi is looking at Rs 5,000 per barrel as a key resistance level for crude. "If we see a rise above this level, we could be looking at gains in the days ahead," he added. Further, he expects Brent crude to test about USD 125 per barrel ahead.

Meanwhile, he expects copper to move till about Rs 430-440 in the domestic market. "We believe a further decline will be coming in on London metal exchange inventories and prices could be propped up to almost USD 8,900 to 9,000 on the LME," he said. One could look to buy copper on dips, he suggests.

Below is the edited transcript of Gandhi's interview with CNBC-TV18. Also watch the accompanying video.

Q: What is your outlook on Crude? How will you trade it in India?

A: We have seen that recently despite the global economic concerns, prices have been more or less underpinned and this is due to the concerns about any supply disruptions coming in from the Middle East and North Africa region. Between the two huge global benchmarks WTI and Brent, we believe Brent is likely to edge higher and test about USD 125 in the weeks ahead.

Foreign suit WTI prices also trade on a positive note, but we have seen that for the last few days now USD 100 per barrel has been a key resistance. We like to see prices clear this level before we can see some further gains and a rise till about Rs 102-103. On the domestic markets, we are looking at Rs 5,000 per barrel as a key resistance and if we see a rise above this level, we could be looking at gains in the days ahead.

Q: How would you trade copper?

A: Copper prices have also been on an uptick. Over the last 2 weeks, hedge funds and speculators have also been trading it on the long side and become net buyers recently. Despite a drop in imports in China, which was mainly due to the Lunar New Year holidays that were at the end of January, we expect that copper prices should trade on a positive note. We'll look to buy into dips.

There was declining trend of inventory is on the London Metal Exchange and with cancelled warrants that is the metal year mark for delivery is also standing close to about 20% of the total inventories. We believe a further decline will be coming in on London metal exchange inventories and prices could be propped up to almost USD 8,900 to 9,000 on the LME. In the domestic markets we could be looking at a move higher till about Rs 430-440.