Sentiment bearish on gold; sell it: Angel Broking

In an interview to CNBC-TV18, Naveen Mathur, Associate Director, Commodities & Currencies of Angel Broking spoke about the outlook for the commodities market.

Below is a verbatim transcript of the interview: Q: Are people banking on higher levels for gold or expect it to plateau out a bit over here? A: We will go for a plateauing out on the bullion prices as of now particularly in gold too. There are a number of fundamental reasons for gold to be at this particular juncture stabilizing at around Rs 27,000-27,500 per 10gm levels. International space for intraday looks a little bearish. The strength in the dollar index and at the same time the fundamental news from the US, the economic data pointers came out yesterday with respect to the new home sales and also the US manufacturing purchasing managers’ index (PMI) came pretty much positive. The US was on a high of five years or so. There are expectations building around the Fed's decision of tapering off, which has led a strength in the dollar index in the late session of US markets yesterday. Indian markets too would witness pretty much sideways to a bearish trend and we would recommend the selling on the high levels of approximately Rs 27,400-27,350 per 10gm levels. We would recommend the stop loss for this trade to be put in at around Rs 27,570 per 10gm and targets on the downside in the range of Rs 27,100 per 10gm or so. Q: How are you trading crude now after the kind of range that you have seen internationally over the last one week? A: The crude is trading at around USD 105 per barrel right now. The levels to watch out on the downside would be at around USD 102-103 per barrel and the upside would be restricted on account of the data came out from the Chinese economy early in the morning yesterday. The pointers are not great for the crude oil. Hence the continuing strategy would be to sell the crude oil in Indian markets also. The decline in inventories is slightly positive, which may hold the prices or which may not exert too much of a downside pressure on the crude oil. However, the strategy on intraday in rupee terms would be to sell the MCX contract on the crude oil for the month of August in a range of approximately Rs 6,300-6,310 per barrel. The stop loss recommended would be at around Rs 6,370 per barrel and we are expecting targets in a range of Rs 6,210 per barrel or so. It is trading around Rs 6,270 per barrel right now.