Sushil Global bullish on gold, advises buy on dips

Excerpts from Bazaar on CNBC-TV18 Watch the full show »

In an interview with CNBC-TV18's Udayan Mukherjee, Saravanan K of Sushil Global Commodities spoke about his strategy for crude, gold and copper.

Below is a verbatim transcript of the interview. Also watch the video.

Q: Let us start with crude, where you are bullish?

A: I think crude continues to remain in a very narrow sideways range in fact between USD 75 and USD 72.5 per barrel area. This seems to be putting in some sort of a triangle formation technically and then till it doesn't close above USD 75.5 per barrel area probably we can still be in this range. Since yesterday it has been slightly bullish, where we had a very large drawdown in crude oil stocks of 7.2 million barrels, which could be supportive.

In case the equity markets continue to meander in this area without coming down, I think crude can be pushed higher. That been the case, on the lower side around in Indian prices, I think Rs 3,450-3,460 is a pretty good area to buy with stop below Rs 3,430 area and a move up to Rs 3,530 to Rs 3,550 is looked forward. Once it closes above Rs 3,550, only then we will see a substantial bullish upside around Rs 3,610.

Q: You are buying gold as well today?

A: I think gold continues to remain firm because no one is willing to sell given the uncertain conditions in Europe. While it is highly overbought, corrections can come in at any point of time, the trend continues to remain bullish. I think it is better to buy on dip or pullbacks rather than chasing it higher. Indian prices Rs 19,020 per 10gm to Rs 18,960 per 10gm is a very strong support zone. Till that holds, I think we can see another push up higher towards Rs 19,200 per 10gm area. Sustaining beyond Rs 19,200 per 10gm will need some more bad news from the European sector. Till that doesn't happen, I think this will be the range for the short-term.

Q: Copper you have got a bearish stance in trade today?

A: Copper after a long time has come in for sharp selling. Today we saw some sharp selling in the Chinese markets early in the morning. That is indicative of profit booking pressures from around Rs 363 area. I think they have seen a sharp run up in copper but it is time for pausing in copper.

In technical terms Rs 348 to Rs 365 could be the range for some more time. On the downside if we hold Rs 348 probably you can get a bounce higher but for today till we see some fresh cues from the US in terms of weekly jobless claims and other factors coming in from Europe, higher levels can be used for profit booking like somewhere close to around Rs 357 to Rs 358 area.

We can use for selling with stop above Rs 361, for a move down to Rs 352-353 which we have reached already, but if it closes below Rs 352, we can see a move down to around Rs 348 where some fresh buying can be advised.

To know Kunal Shah, Nirmal Bang Commodities' views watch the accompanying video.