Remain short on mkt; rupee to appreciate soon: Priti Gupta

In an interview to CNBC-TV18, commodity market expert, Priti Gupta, Director of Anand Rathi Commodities shared her outlook on the market and precious metals - gold and silver.

Commodities lose flavour: Time to sell gold, silver, crude

Below is the verbatim transcript of Gupta's interview with CNBC-TV18.

Q: Your views on gold and silver where the real pressure has build up. How are you trading that with what kind of support levels now?

A: Over the last two trading sessions we feel we are in a freefall. Just look at the largest two days fall that gold has seen. Critical understanding here is that this is a panic selling is triggered by the news that Cyprus selling its gold reserves.

We have seen, over the last two days, a huge build-up on Option buying by investors and therefore a build-up in the Put positions in gold. Every price hike that we see will put more pressure on gold prices.

In dollar terms, one would see support levels at USD 1,297 per ounce and if it breaks that then one could see USD 1,000 further down. To convert into rupee terms, I would look at Rs 25,000 per 10gm as the first support level and if it breaks there we could look at Rs 24,500 per 10gm.

The idea here is to remain short on the market right now, it is very risky to stay on the buy side because the price movements are very large given that the activity is limited on the market. Therefore, USD 30-40 movement would be a very easy movement to see. Suggestion is to stay on the sell side of the market.

Q: At this point in the local market, is there any kind of a margin call pressure that has build-up already, which may cause further pressure on the market or is it adequately hedged and margins are in place right now?

A: Margins are in place and adequately hedged, of course we did see the circuit hitting. So, every price movement would only put additional pressure on the downside. However, it will be the international markets, which will dictate prices as always.

The rupee appreciating, which we expect to happen over the next few days, would add even more pressure. Therefore, Rs 24,500 per 10gm or Rs 24,000 per 10gm level seems very plausible for gold.