Dollar will continue to remain strong for now: T Gnanasekar

T Gnanasekar, Director of CommTrendz Research & Fund Management spoke to CNBC-TV18 about his views on the commodity space.

Below is a verbatim transcript. Also watch the accompanying video Q: Are you expecting any strength in the crude oil market today? A: Very unlikely. If at all there is strength, it will be on the back of depreciating rupee. The Chinese numbers have not come out well. But despite that crude is holding on because of maintenance issues in North Sea which is giving some kind of a supply glut temporarily. That is giving support for crude. Q: What are you doing on the precious metals now? Would you buy any dips in the market? A: Immediately, it’s still a range bound sort of a market. So, it’s better to be cautious. Once it comes to the lower end of the range, somewhere near Rs 29,700-29,800 per 10 grams, it would be a buy. Its Fed which disappointed, ECB disappointed and now markets are expecting China for a possible stimulus because the numbers which have come in recently have come pretty bad. So, there could be some positioning. Typically announcements from China happen on the weekend. So, at least for today by closing, my sense is that it will still be on the upper side. I see the dollar recovering, so that’s going to put pressure on gold. But then, the same thing would happen in the local market when the rupee would depreciate. That will support and cushion the prices. So, 29,750-29,800 per 10 grams would be a good level to buy. We are looking at Rs 30,150-30,200 per 10 grams again. Q: How would you approach the currency Futures trade this morning? A: Dollar against the rupee would be sort of a buy on dips for a very near-term, though potentially inflows could come on the back of some of the IPOs scheduled. Dollar strength would continue in the near-term. So, if I am going to look at it for next two-three days, I would be on the long side playing for something like 56-56.25. Q: Any thoughts on base metals like copper? A: The Chinese data has not come out very well. So, that is going to put pressure on base metal market as a whole. Copper is good for sell right now, somewhere close to Rs 419 per kilogram with a stop at Rs 422 per kilogram and a possible target of Rs 413 per kilogram. Base metal as a pack, except for nickel, could decline today.