Expect correction in gold & silver: IIFL

In an interview to CNBC-TV18, Tarang Bhanushali of IIFL spoke about the current trend in commodities market.

Below is a verbatim transcript of the interview: Q: What is the call on gold after the strength you have seen in these last couple of days globally? A: Gold has taken a breakout above its 150-days average and 50-days average both and looks good on the chart. We believe that today we might see some correction in gold largely on some bounce back in the US dollar. So for intraday purpose we are selling gold in the domestic market. One can sell around Rs 27,640 per 10gm keeping a target of Rs 27,450 per 10gm and a stop loss of Rs 27,710 per 10gm. Q: What are you doing with silver now? A: Silver too we believe would follow gold in an intraday trading but we believe the intermediate trend, which was downwards, has changed over the last few days. The breakout above USD 1,290 per ounce in gold has brought the bulls back into the market and now we are seeing some steady buying into gold. So as long as it stays above USD 1,320 per ounce in the near-term in the international market, it is in an upward trend. If it breaks USD 1,350 per ounce then maybe we would see USD 1,400 per ounce in the near-term. So we are looking at a range bound movement between USD 1,320 per ounce and USD 1,350 per ounce for gold. So, we expect a bounce back in silver after a day or two but for intraday we expect some correction coming into silver too.