Gold and silver prices likely to face pressure: Emkay

Ashok Mittal of Emkay Commodities is expecting to see some correction in gold. “There will be pressure on gold and silver prices. What we are actually advising now is to sell somewhere about USD 1,770 per ounce to USD 1,775 per ounce and expecting a downside target of near USD 1,750 per ounce on international markets,” he said in an interview to CNBC-TV18.

Below is the verbatim transcript of the interview

Q: What is the trade in gold? Will you go long on it? What are the targets?

A: Our view on gold and silver is not very bullish. We expect some kind of a correction to happen because gold is now in the range of USD 1,750 to USD 1,780 per ounce and it has not been able to break USD 1,800 per ounce. Upticks should be used to sell because we expect tomorrow’s US GDP Data will be slightly better than expectations.

So, there will be strengthening in the US dollar. There will be pressure on gold and silver prices. What we are actually advising now is to sell somewhere about USD 1,770-1775 per ounce and expecting a downside target of near USD 1,750 per ounce on international markets.

In Indian markets, on MCX, Rs 31,500 per 10 grams which is slightly away from the current levels should be sold with a stop loss of about Rs 31,650-31,700 and we are targeting Rs 31,200 per 10 grams in the next two-three sessions.

Similarly, for silver, Rs 63,000 per kilogram is a level which we look to say sell and then expect Rs 62,000 per kilogram and lower than that as our target. What we are recommending is sell on upticks in gold and silver both.

Q: Would you say the same for crude? There you have the added advantage that globally also crude is a little under the weather?

A: Although we have achieved our earlier target on downside of USD 90 per barrel but we are expecting two three reasons why crude can be bought at the current levels on dips. One is of geopolitical issues and tensions happening. Second, technically this is at a good support level now. Thirdly, we do expect the inventories to be slightly lesser than the previous one.

So, between USD 90-91 per barrel which is a good support, crude should be bought and we expect somewhere between USD 93-94 per barrel as the target and expecting USD 89 per barrel as a stop loss. So, dips from the current levels should be bought.

Similarly, on the MCX, if you buy Rs 4,830-4,870 per barrel and keep a stop loss of Rs 4,810 per barrel, you can expect targets of Rs 4,980 per barrel. Buy on dips is the strategy for crude oil.

Q: What are your thoughts on copper? Also, what is your view on rupee, currency futures? How would you deal with the November futures?

A: We are expecting dollar-rupee to go slightly up because it has now corrected very fast. There is some kind of upside momentum. Now, we are at 53.58 so another25-30 paisa upside is likely. However, we have a very firm view that it will reach 52-52.50 in the long term.

We are slightly bearish on base metals. We are expecting copper prices on LME to be somewhere around USD 8,150-8,200 per tonnne and on the Indian markets we expect about Rs 8-10 down from the current levels. We recommend selling on upticks for the next three-four sessions.