Buy crude; sell gold, silver & copper: Emkay Commodities

Ashok Mittal, CEO of Emkay Commodities spoke to CNBC-TV18 about his views on the commodity markets.

Expressing his positive views on crude Mittal said that crude oil prices should move up as they have corrected a lot from higher levels. Also Read: Buy MCX Crude Oct around Rs 4720; target Rs 4800: Geojit However, with a cautious stance on gold he added, "On MCX we suggest selling gold around Rs 31,500-31,600 per 10 grams and expecting targets of Rs 31,200 per 10 grams in the next three sessions." Below is the verbatim transcript of the interview Q: How are you approaching crude now after the pickup that we saw globally yesterday? A: Crude oil should take some kind of a support from these current levels. I am expecting prices to slightly move upward because of two reasons - one is that it has corrected a lot from the higher levels. We do expect that some kind of bounce back should happen near USD 93-94 per barrel. In Indian market Rs 4,800-4,820 per barrel should be a good support and then should go to Rs 4,920 per barrel levels in the near term. Also, the only reason fundamentally is that there have been some geopolitical issues and this tension should keep some kind of a premium on the crude oil prices. So, we are recommending buying on dips for crude oil for near term. Q: Is it prudent to continue to be bullish on gold? A: We have seen that gold is not able to close above USD 1,800 pre ounce. So, the near term range is USD 1,700-1,800 per ounce. Unless it breaks USD 1,800 per ounce, it may go down to USD 1,750 per ounce or more. Right now, we should not be long on gold. For short-term, we are recommending to sell gold on upticks above USD 1,770-1,780 per ounce and expecting USD 1,750 per ounce. Similarly, on MCX we suggest selling gold around Rs 31,500-31,600 per 10 grams and expecting targets of Rs 31,200 per 10 grams in the next three sessions. Q: What is the view on silver which has become far more volatile than gold? A: Silver has always been more volatile than gold. But I think the pressure on precious metal is also keeping the silver prices lower. If you look at the range, I think it is in the narrow range of about Rs 61,000 to 62,500 per kilogram. So, Rs 62,000 per kilogram is the resistance right now which we are recommending to sell for a target of Rs 61,000 per kilogram. I think another USD 1 downside is possible on silver. Q: Do you have a trading view on copper? A: We expect the base metal pack to remain soft for next two-three sessions. Copper, which is about USD 8,200 on LME three months forward, should be sold because the outlook for Chinese economy or overall growth of the economy especially on the industrial side is not very positive. Hence, we expect base metals to remain little under pressure. In the Indian markets copper should be sold around Rs 436-437 per kilogram for a target of Rs 430 per kilogram.