Buy gold, silver on dips for medium term: Tarang Bhanushali

Tarang Bhanushali of IIFL spoke to CNBC-TV18 about his views on the commodity markets.

Also Read: Experts bullish on gold, silver, copper; negative on crude Below is the verbatim transcript of Bhanushali’s interview on CNBC-TV18 Q: We have seen a bit of uptick in gold. What would your strategy be on that commodity? A: Gold broke above USD 1,740 per ounce level which it was not able to break for almost 45 to 50 days. Till it stays above USD 1,740 per ounce, we remain long on it and keep a medium-term target of USD 1,780 in the international market. For the domestic market, we expect appreciation in the rupee and profit booking in gold to take prices lower. That would be a buying opportunity for us. So, in the domestic market we believe buying on dips would be a good strategy for gold in the near term. Q: Do you have a similar strategy on silver as well? A: We expect some correction in silver’s domestic prices. That again would be a buying opportunity. So, maybe a medium term investor can keep a strict stop loss of Rs 400 down the line and then buy silver for a gain of Rs 1,000. Q: Crude has opened soft. Are you advising to sell that as well? A: Crude has jumped largely due to the tensions in the Middle East. We do not expect the events to impact prices much in the near-term. The demand situation is not great and we are already into a surplus market. I do not expect the price rally to hold for more than a day or two. If we see some spikes going up, then it should be a good selling opportunity. In the near-term we believe USD 86-86.50 per barrel is the level where crude is headed. So, we are keeping a sell recommendation. Q: Why do you have a buy on copper today? A: Copper in the domestic market has broken above Rs 428-429 per kilogram on the back of good Chinese PMI data. We believe there would be some short-term buying into copper. The medium-term remains negative but for a day or two after a good industrial data, we believe we would see some buying in copper. So have a buy rating on copper at Rs 429 per kilogram, for target of Rs 434 per kilogram.