Angel Broking bearish on bullion, crude & base metals

Naveen Mathur of Angel Broking spoke to CNBC-TV18 about his views on the commodity market.

Also Read Indian gold importers stay away seeking price direction Brent crude edges down toward $112, storm impact limited Below is the verbatim transcript of the interview Q: Why are you bearish on bullion this morning? A: The weak sentiments in the global markets would put the pressure on the downside for the bullion markets. Overall if we see, it looks like that the trading would be pretty range bound today. Therefore, sideways to a bearish note may be expected. The weak sentiment comes in from the Japanese retail data which is negative. We also saw yesterday, release of the US GDP figures which were slightly better than what was the prelim data was talking about for the Q2. Hence, it looks like that the QE3 may not be talked about or not much monetary easing may happen in the Jackson Hole summit. Therefore, the weak sentiments would put a pressure down on the bullion pack and for that matter all the commodities, be it crude or base metals. So, I think the selling would be recommended therefore for the Bullion. MCX contract on the October month can be sold in the range of around Rs 30,950 per 10 grams. Stop loss for this trade can be put in at around Rs 31,020 per 10 grams and we are expecting target downside at Rs 31,750 per 10 grams. Q: You have a sell call on crude as well. Do you see a substantial correction from here? A: Yesterday, the inventory data came up unexpectedly on higher side. So, the pressure would be building upon. 3.8 million barrels is what the inventory is unexpected increased by. So, we feel that markets would therefore have a pressure on the downside and therefore a sell strategy. Q: You are not very optimistic on base metals like Copper either? A: As I said earlier, the economic sentiments are not very positive for the day. As we said, the stimulus measures which are expected in the Jackson Hole Summit which is starting today, I think that is where the entire issue is resting upon. The ECB meeting is due on the September 6th and that is also much awaited meeting that what ECB president takes calls on the bond buying program which they have hinted earlier in the month. So, overall the sentiment on the base metal pack is bearish. Hence, a sell strategy, selling on copper would be recommended at around Rs 423-424 per kilogram levels. Stop loss at Rs 426 per kilogram and we are expecting targets at Rs 419 per kilogram.