Emkay Commotrade bullish on gold, silver

Ashok Mittal of Emkay Commotrade expects gold to continue its bullish trend given the flush of liquidity into the market. Mittal anticipates gold to trade over Rs 29,100 per 10 grams on the MCX. According to him, silver may give better returns versus gold in the short-term.

As regards to crude, Mittal recommends short-term traders to sell the commodity at the current levels of USD 107 per barrel. In the Indian market, Rs 5,300 per barrel levels should be a good sell, keeping a stop loss at Rs 50 per barrel and target of almost Rs 5,200 per barrel.

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

Q: What could be a money making strategy in gold?

A: I think gold has picked up in the last few days and we expect this firmness to continue because of liquidity coming into the market. Also, the European events will keep the volatility high. But we still expect buying around USD 1,785 per ounce should be a good idea and keep a downside maybe about USD 7-8 per ounce  from the current levels. We expect to see somewhere about USD 1,805 per ounce or USD 1,810 per ounce on gold in the international market. When we look at MCX prices, we should see more than Rs 29,000 per 10 grams from the current levels. 

Q: How would you trade crude?

A: Crude has gone up a lot specially because of the problems of Iran. But I think now we have seen some kind of a profit booking happening so technically, the correction may continue a little bit more. We expect USD 105 per barrel or maybe further below from that level so we are not buying crude at this level, we are waiting for some correction to happen. So for short-term traders, we recommend to sell at the current levels of USD 107 per barrel, keep USD 1 per barrel as a stop loss and USD 2-3 per barrel target on the downside. So, in the Indian market, 5,300 per barrel levels should be a good sell, keeping a stop loss at Rs 50 per barrel and target of almost Rs 5,200 per barrel.

Q: Between gold and silver, is silver a better bet, are there more percentage gains to be made there?

A: While we expect USD 1,800 or USD 1,810 per ounce on gold, the target for silver should be USD 38. From current levels of Rs 67,000, we expect a target of Rs 62,500 to 63,000 in the near-term and with a stop loss of just about Rs 1,000, in terms of percentage, silver should give better returns versus gold.

In fact, another interesting observation is on platinum because platinum was almost about USD 150 lower than gold and now the difference is only USD 60. So we expect that platinum should outperform these commodities and maybe platinum will go above the price of gold, which was the case few months ago.