Ventura Comm says Rs 26,940/10gm good level to enter gold

NS Ramaswamy, head commodities, Ventura Commodities expects gold to spend some time in USD 1410 and USD 1485 range.

In an interview to CNBC-TV18, he says, the narrowing US trade deficit and the comments coming out of the upcoming G7 meeting will lend support to the dollar therefore further adding to weakness in gold. Also Read: Why buying gold this Akshaya Tritiya isn't advised "In rupee terms, Rs 26,940 could be a good level to enter expecting levels of Rs 27100-27150. In dollar terms, we expect gold to again bounce back to USD 1455 and beyond that to USD 1463," he says. Here is the edited transcript of the interview on CNBC-TV18 Q: What is your strategy for gold? A: Straight away if we have to talk about gold, we expect the range between USD 1410 and USD 1485. So, we continue to see some range-bound activity in gold. Given the fact that you have the G7 meeting of two days seminar at UK and also the way the trade deficit narrowed in US, these factors are probably giving a bit of support for dollar and then weakness in gold is expected. So, if we were to talk of the levels we expect in the range of USD 1441 on a very short-term perspective, one should even venture out after this fall of on Friday to go long position. Maybe in rupee terms, Rs 26,940 could be a good level to enter expecting levels of Rs 27100-27150. In dollar terms, we expect gold to again bounce back to USD 1455 and beyond that to USD 1463. Q: What about crude, what kind of strategy will you have over there? A: Crude is also a buy, although we now were discussing about that as regards Brent and wholesale price inflation (WPI). The major component where we see is the dollar strengthening. The way the dollar strengthening is happening and the European demand which – the numbers aren’t very supportive like the Italian numbers on the industrial output or the UK trade data are not supportive. So probably that could be a weakness but then we still see the driving season is still on. There are other numbers from China and the US which is giving some fillip or good support for the demand factor. Hence, we expect crude to behave in the range between USD 94 per barrel and USD 96 per barrel. In rupee terms May contract MCX is a buy in the range of Rs 5245 per barrel expecting levels of Rs 5290 per barrel and beyond that to Rs 5230 per barrel. In dollar terms, we expect it to reach close to USD 97.20 per barrel. The range is still continuing between USD 93 per barrel and USD 99 per barrel. Q: Give us one more commodity strategy – we did see copper gain in the global markets. At the moment is there a strategy in shorting or any other commodity if you think there is more money in it? A: That is a good point. Chinese data spurring demand and the entire base metal pack copper looks to be extremely good. We in fact recommend MCX June contract – we should be going long at the range of around Rs 409. We expect levels of Rs 412-414 and with a stop loss of Rs 407 copper looks to be very good. In the international market if we were to see a breakout above USD 3.5 per pound then probably copper should be seeing further highs from these levels. So, base metal pack the strong upbeat data of the non-farm payroll or other things from US is also giving a very good support and we also see London Metal Exchange (LME) and Shanghai slow draw down happening. The surplus which we were wondering is slightly turning out, the draw downs are happening in the stock also for the base metal pack. So, copper is a good buy.