Dollar index could rally in near-term: Commodity Broking

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Dollar index could rally in near-term: Commodity Broking

In an interview with CNBC-TV18, Jonathan Barratt, Managing Director, Commodity Broking Services, speaks about various commodities and his outlook for the commodity market.

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Excerpts from Markets Midday on CNBC-TV18 Watch the full show » RELATED NEWS See further run for gold, may touch $1500/oz: Macquarie Sec

In an interview with CNBC-TV18, Jonathan Barratt, Managing Director, Commodity Broking Services, speaks about various commodities and his outlook for the commodity market.

Here is a verbatim transcript of the exclusive interview with Jonathan Barratt on CNBC-TV18. Also watch the accompanying video.

Q: All the commodities have performed well in the recent months but where in future do you expect the most growth?

A: I think we need to selectively look at some of them. Gold, I think will continue to look okay; I think its still going to remain a better bet just purely because of what could emerge. I think we still have got more shorts in the system to come out and we will see it pass that USD 1,200 per ounce level.

Crude oil remains relatively well bet and I think with the prospects of the recovery continuing, then I think crude will break through USD 80 per barrel and continue to trade higher but I really want to see that break occur.

When I look at copper, I actually get a bit of concern with copper because of the amount of concerns we have got in the property sector at the moment particularly in America. I feel that actually copper might not go as far or not perform as well as perhaps some of the other commodities. In fact we are starting to feel as the property sector losses particularly in the States start to unfold that that would relate to weaker demand for your primary input such as copper and then copper could come under pressure, more so.

Q: What is the bottomline do you think copper is going to hold or are the inventories perhaps are going to start weighing on this? Where does it end up?

A: I think with copper, the gain in inventories is very important. I certainly see that we are obviously going through that Christmas period where the demand is certainly off but I really want to see what happens in Q1. I think the weakness in the dollar is another key point because I actually feel that we traditionally get a rally for US dollar and I think leading into 2010 the US dollar will actually firm from here. That weakness which we have seen will start to abate and if we get a break through that dollar index say 75.80 then I think that will be the trip point for me to where I will start to think that assurgent for copper will actually slow. So, I think there is a combination of things; I think it's the dollar, the inventories and also the property sector in the US will all create this area, where copper could come under pressure or it will least this rally, we have seen slow down.