Experts bearish on gold, copper; see rupee at 54.55/$

With the BSE Sensex and NSE Nifty facing a choppy trade session and the rupee touching all-time lows of 54.32 a dollar today, it has been trying times for the stock as well as equity markets. In an interview with CNBC-TV18, Priti Gupta of Anand Rathi Commodities and Tarang Bhanushali of IIFL share their trading strategies during weak markets.

Bhanushali and Gupta, both believe that the pressure on gold will continue and therefore, have a bearish outlook for the golden metal. In a grim situation like this, the equity market also is keeping a close eye on crude. Bhanushali explained, "USD 90 per barrel is what we are looking at in the near-term. It is a good support at that level. Maybe after a sharp decline, we would see some buying coming in."

Talking about the stressed rupee, Gupta expects the Indian currency to trade at 54.55 per dollar for the next couple of days.

Below is the edited transcript of the interview on CNBC-TV18. Also watch the accompanying video.

Q: How would you trade gold now?

Bhanushali: The strengthening of the US dollar would further put pressure on gold in the near-term. Break below 1.28 for the euro will take it to 1.255. This is where we believe there is some support for the euro.

We believe the pressure on gold will continue, till USD 1500 per ounce levels. We would see USD 1480 per ounce, which we see as a strong base from where there would be some bounce back. But, till USD 1500 per ounce levels we do not expect much bounce back coming in.

We would remain on the short side for gold. On the MCX and one can go short around Rs 28,000 per 10 gm levels, keeping a target of Rs 27,800 and stop loss of Rs 28,110 per 10 gm.

Q: What are you telling your clients to do with gold?

Gupta: We wake up to the grim situation in Greece today which makes the dollar even stronger. Given that gold looks very bearish and in fact today it has already opened Rs 27,800 -27,900 per 10 gm, we could look at levels of about Rs 27,500 and maybe even Rs 27,300. Essentially, short on gold.

Q: What are you telling your clients about copper?

Gupta: Copper is extremely bearish given the Chinese numbers that have been coming in. We would look at a level of USD 7500 per tonne on the LME which would convert about Rs 430-410 per kg on the Copper MCX.

Q: It is crude that everyone in the equity market is watching, how are you trading that and what kind of downside risk do you see there?

Bhanushali: I believe, in the international market USD 90 per barrel is what we are looking at in the near-term. It is a good support at that level. Maybe after a sharp decline, we would see some buying coming in.

USD 90 per barrel is the near-term level that we are looking at and till USD 90 per barrel one can go short. On the MCX one can go short with a target of Rs 4960-4900 per barrel and should maintain a stop loss of Rs 5030 per barrel.

Q: You track the rupee dollar futures as well, how would you trade it today?

Gupta: Essentially, it looks range bound between 54 and 55. You have seen strong measures from RBI coming in but the impact seems to be muted. Hence, you could even look at 54.55, maybe not intraday, but over the next couple of days.

On the other end it would look at a 53.60 but it looks extremely difficult. It is a double whammy – one is the dollar strengthening and our in-house measures, the rupee depreciating to weaker inflows etc. I think its going to be a tough task for the rupee.