Naveen Mathur bullish on metals and crude for medium term

Mathur said, "Fed would come up with some kind of a quantitative easing and there is news talking about that they may buy something around USD 300 billion into the US treasuries and USD 400 billion into the mortgage bonds."

Below is the verbatim transcript of the interview

Q: How is the commodity market positioned before the Fed meeting later this evening?

A: The markets are taking it very positively as we heard people talking about this. A green consensus now building upon that the Fed would come up with some kind of a quantitative easing. There is news that they may buy something around USD 300 billion into the US treasuries and USD 400 billion into the mortgage bonds.

It’s overall very positive, what we have seen yesterday also, as per the German constitutional court ruling - they have gone ahead with a condition. But then things are moving in positive direction. There is some kind of a positive bandwidth coming into the markets and we are seeing that particular news or the decisions taking the commodities on the higher side.

Gold, silver, base metal and crude oil looks positive from a medium-term perspective. But, for the intraday positions, we feel that the markets have traded higher in last couple of days. A profit booking or liquidation may come in. So, intraday strategy for the precious metals would be to sell gold and silver.

Q: What is the strategy for crude at this point?

A: We expect crude to buyout for the intraday strategy on the MCX for the month of September in the range of around Rs 5,320- 5,330 per barrel levels. We recommend stop loss for this trade around Rs 5,270 per barrel and target on the upside in the range of Rs 5,400 per barrel.

Q: What about base metals?

A: The sentiment is building up positively for the markets, let it be the euro zone or for the Chinese economy. People are expecting stimulus coming out from the China also. So, all these sentiments are creating positive vibes. Therefore, the base metals pack on long-term looks positive.

But technically, for the day a selling pressure can creep in. We recommend therefore selling the copper contract on the November month for MCX at around Rs 454 per kilogram to Rs 455 per kilogram levels, stop loss for this trade should be put in at around Rs 447 per kilogram. We are expecting targets of downside at around Rs 450-451 per kilogram.