Investing in silver better idea than gold now: PJ Commodity

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

In an interview to CNBC-TV18, Shreekant Jha, managing director of PJ Commodity Ventures shared outlook and strategies on various commodities like crude, gold and silver.

Jha recommends selling crude. Crude has not gathered momentum as a trend on the downside as yet, so one could trade cautiously, Jha adds. "Sell it at Rs 4,950 per barrel and keep stop loss at Rs 5,100 per barrel."

He has a buy call on gold, but perfers investing in silver than gold . "I am not saying that one is better than the other, but silver is slightly gaining momentum." He sees more upside in silver.

 "Gold has been hanging around in that Rs 27,500-28,500 per 10gms for too long, so your money gets just stuck there. But, silver is at least making some progress on week to week basis," he explains.

Below is the edited transcript of Jha's interview with Latha Venkatesh and Ekta Batra of CNBC-TV18. Also watch the accompanying video.

Q: How do you play crude in India in MCX? Is there more to this rally or is this profit taking time?

A: We would still look at selling into crude. It was stuck in a range for a while; it has broken at the lower side of the range at Rs 4,900 per barrel. So, as it goes it would be a sell at Rs 4,950 per barrel and again we will look at Rs 4,800 per barrel.

It has not gathered momentum as a trend on the downside as yet, so one could trade cautiously. Sell it at about Rs 4,950 per barrel and keep your stops at about Rs 5,100 per barrel. We will have to see if it meets targets of Rs 4,800 per barrel.

Q: How will you trade gold at this point in time? What are your medium-term levels for it, what do you think it can scale up to?

A: It is a buy, but it is not doing anything much. I don't know whether one can go whole hog into it by buying a lot of it. One can build positions and hopefully we should see Rs 29,000 per 10gms levels.

Having said that, it is struggling a bit around Rs 28,100-28,300 until it moves up a bit, one may have to just wait for a while and keep stop loss below Rs 27,500 per 10gms or Rs 27,800 per 10gms.

Q: What about silver, does that follow gold in terms of being a buy. Are you as bullish?

A: If you ask me to put money either in one of these two, I would put it on silver rather than on gold at this juncture. I am not saying that one is better than the other, but silver is slightly gaining momentum. It has reached Rs 56,000 that we were looking at. Now, we are looking at Rs 58,000 and Rs 59,000.

If it does that then we will get more momentum on the upside, when it reaches around Rs 62,000 levels, but maybe it is a bit too early to say that now. Since the trend has to be established comprehensively, one can take a trade at a time, buy Rs 56,000 for about 58,000 but by and large it is looking much better than gold at present. 

Q: Hasn't Rs 56,000-58,000 been a kind of a barrier for some time now. Technically is it very difficult to crossover to 60,000?

A: Is not like that. It went up to 70, came back and corrected down and it is now consolidating. Since it is consolidating, I wouldn't look at it as a bull run , I would look at it more as a trade at a time. Once it crosses that barrier of 58,000-59,000, then adding positions, looking at it and investing more would be a good idea.

Gold also has been hanging around in that Rs 27,500-28,500 per 10gms for too long, so your money just stuck there. But, silver is at least making some progress on week to week basis.