Sentiment remains bearish for precious metals: IIFL

In an interview to CNBC-TV18, Tarang Bhanushali of IIFL shared outlook on gold, silver and crude.

Below is a verbatim transcript of the interview:

Q: How are you telling your investors to be in gold and silver this morning after what happened overnight?

A: Sentiment continues to remain bearish for precious metals. After a bounce back last month we have seen selling coming into most of precious metals. It should continue and we should hit fresh new lows in the near-term.

In the international market, gold should find some support around USD 1320 per ounce and if it breaks that level then USD 1270 per ounce is what we are looking at.

The international trend continues to be in the downturn but the impact in the domestic market is offset by the weaker rupee and prices for us are quite high if you compare it with previous month.

In the domestic market, we expect some weakness, we expect the rupee to taper around 61/USD and then maybe some pullback so that would lead to lower precious metals.

We are short both on gold and silver in the international market as well as in domestic market.

Q: Crude has not seen that much of an impact relative to other commodities. How would you trade that and any change in trading strategy because of this expected implementation of commodities transaction tax (CTT) come on the July 1?

A: Strategy is that the long-term or medium-term investors would not be impacted. At the moment, the strategies will not change for us.

Crude has outperformed most of the commodities this year and even in the recent last fifteen days, it has outperformed because of the Middle East tensions. We expect that it would not cross USD 98-99 per barrel mark in the near-term and then it may slip to around USD 94-93 per barrel levels. So sell on rise is the strategy that we have for crude in the near-term.