Bullish on gold; bearish on crude, says IIFL's Bhanushali

Tarang Bhanushali of IIFL, in an interview with CNBC-TV18, talked about what's going on in the commodity market. According to him, precious metals would remain strong, largely on the expectations that sustained liquidity flows. For crude and base metals, he would go back to the fundamentals wherein demand is waning.

Also read: Commodity bets: Trading tips for gold, zinc, copper & lead Below is the transcript of his interview with CNBC-TV18 Q: How have yesterday's events gone down with the commodities market? A: If you look at the overall complex it is a mixed feeling. We see gold holding on to the gains from the previous sessions. We saw sharp selloff in crude oil. So, it has been a mixed bag for most of the commodities. We believe precious metal would continue to remain strong, largely on the expectations that liquidity would continue in the market. Crude and base metals again would go back to the fundamentals wherein demand is waning. Hence, there would be pressure. So, medium-term looks on the downside for them. Q: What are your targets for gold and silver by Diwali? A: By Diwali, we believe that still for the next two-three trading sessions we would continue to trade in the range of USD 1,700 per ounce on the downside and Rs 1,740 per ounce. On the upside, we believe once USD 1,740 per ounce is broken then we are headed towards Rs 1,800 per ounce. But, we need a crucial breakout above USD 1,740 per ounce for a good movement on the upside. So, we are targeting at USD 1,740 per ounce at the moment for Diwali and in the domestic market maybe Rs 300-400 upside from here. Q: How are you trading crude in the local market? A: We believe that the downside for crude looks to around USD 80 per barrel on the NYMEX. We believe it is headed towards USD 80 in the near term. So maybe for intraday purpose we can buy at current levels because it fell sharply yesterday. We expect a minor bounce back and then maybe the trend again would go down. So, for intraday purpose yes we are net buyers. But, for the overall medium-term trend we expect crude to head towards USD 81-82 per barrel levels.