Gold, silver & crude prices to head higher: Ashok Mittal

Ashok Mittal of Emkay Commodities expects gold and silver prices to trade on the upside. "The overall range for gold has been closer to USD 1715 to USD 1800 per ounce. Now, we are on the lower end of the channel so we expect some kind of bounce back to happen," he told CNBC-TV18 in an interview.

Also Read: Buy MCX Copper Nov Fut on dips: Fortune Financial

"The appreciation of rupee will add to the downside. That impact will be seen on MCX prices," he further added.

Below is the verbatim transcript of the interview

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

A: We expect gold and silver to be slightly on the upside. The overall range for gold has been closer to USD 1,715-1,800 per ounce. Now, we are on the lower end of the channel so we expect some kind of bounce back to happen. We expect gold prices to trade between USD 1,765-1,770 per ounce on the international markets.

In the Indian market, the prices may not be so high because of the rupee which is appreciating. We expect rupee to appreciate but still we anticipate Rs 31,000 per 10 grams on MCX to be a good level to buy. We expect upside movement of USD 15-20 that means you have an upside potential of almost Rs 250- Rs 300. The target can be Rs 31,300 per 10 grams. On the lower side, we don’t expect USD 1,730 per ounce to be broken in the near term so you can have a good risk reward ratio. So, we advise buying gold on dips.

Q: Would you expect the same of silver, a strong bounce back?

A: We have seen that silver has been bouncing. The eurozone data has been supporting euro. So, euro has gone up which is actually pushing the gold-silver prices also higher. We are also closer to the support level in case of silver.

So, for silver, we expect Rs 60,000 per kilogram level in Indian market is a good level. We can expect somewhere about Rs 61,500-62,000 per kilogram level to be achieved. So, buying silver is also advisable.

Q: What is the good way to approach crude now after the recent volatility in a tight range in the global market?

A: Crude has actually corrected downside and taken some kind of a bounce back from sub USD 90 per barrel levels. Now, we are close to USD 92.50-USD 93 per barrel levels on the international market, the Nymex crude oil. We expect the overall trend for long-term to be bearish so we are expecting prices of close to USD 80 per barrel. But, for shorter-term, two-three days period also, we think USD 93 per barrel is a resistance which should be sold.

On the downside, we expect prices to be close to USD 90 per barrel in near term. The major reason is that the inventory levels are quite high than expected from the previous ones. The appreciation of rupee will add to the downside. That impact will be seen on MCX prices. In rupee terms, we expect a range of Rs 4,800-4,900 per barrel. On the upside, sell close to Rs 4,900 per barrel. Keep USD 0.5 stop loss which is about Rs 40-50. We expect USD 2 on the downside. So, the downside will be close to Rs 100 which will be close to Rs 4,800 per barrel on MCX.