Here's how you should trade commodities next week

Gold struggled to make headway on Friday, as the euro came under pressure after Standard & Poor's downgraded Spain's credit rating, while investors waited for a monetary policy decision by the Bank of Japan later in the day for further trading cues.

Gold prices gained Rs 100 to touch over four-and-a-half-month high of Rs 29,440 on strong buying by stockiest and retailers to meet the wedding season demand. The precious metal, which was last seen at this level on December 5, has gained 450 in the last six sessions.
Traders said besides buying by stockiest and retailers for the ongoing wedding season, a firming trend in overseas markets also aided the sentiment.
Trading sentiment remained bullish as gold rose the most in two weeks in global markets on speculation that the Federal Reserve may increase stimulus measures to bolster the US economy, they said.
According to Shreekant Jha, managing director at PJ Commodity Ventures, the yellow metal can touch Rs 29,500 per 10 gm in the immediate future.
Yesterday, copper was the big gainer in most of the key commodities on back of easing hopes. Jonathan Barratt, CEO at BarrattsBulletin.com sees prices gaining between 10-15%, if not a little bit higher. " Below is an edited transcript of their discussion on CNBC-TV18. Also watch the attached videos. Q: A word on gold and what you are seeing as the trend from here on. Many people were suggesting that even if you buy at this point there is not too much of an upside one can expect in the medium-term. What is your sense? Jha: At this juncture gold is looking good because if you go back a few weeks, gold was stuck in a range. It was stuck in a range where it threatened to break the Rs 29,000 per 10 gm levels and then again get back to the Rs 28,000 per 10 gm area.
 
Now, with the break of this Rs 29,000 per 10 gm level, a new trend should emerge. But I still would like to see another 100-200 points for it to gain. We could be sure of another upmove, since it has been consolidating for a while. I think another 100 points up and we could always buy it under retracement around Rs 29,000 per 10 gm for further gains. I would look at Rs 29,500 per 10 gm in the immediate future. Q: Yesterday, copper was the big gainer in most of the key commodities on back of easing hopes. It has already topped the USD 3800 levels. Where do you see copper headed? Barratt: I think copper remains relatively well bid. I can actually feel that the supply tightness we have seen in the market or what we are expecting, will actually help support what we are seeing. One of the key drivers here is the infrastructure spends that we have got in India. The infrastructure spend that we have got also in China.
There are massive amounts of infrastructure that require quite a lot of input for copper. So I get a sense that copper market is better bid at the moment and I feel the prices will start to move higher. We are about to commence a very good trend and probably see prices gaining between 10-15%, if not a little bit higher. So I have my bullish cap at the moment. Q: Do you have the same the same bullish view on crude? Crude is back at its four-week high. What is your view on Brent and how Brent would move from here? Barratt: This is a really interesting thing because when we look at what is happening in the crude market, it had a lot of negative news. When you look at what is happening in Spain, the potential slowdowns, GDP in the US perhaps not that positive, crude has had a lot of bearish news. Yet the price of crude remains relatively well bid. We have been in this range for quite some time.
So it really is resilient to moves to the downside, which suggests to me that if we start to get some favourable response in terms of economic data that we will start to see it moving higher.
I am bullish on oil. I cannot see it going too much higher but I would like to see it test the top end of the range maybe for another USD 4-5 from here. Q: Any kind of a short-term trading strategy on oil? Jha: For the last six months, it’s just been hanging around in that area, looking at MCX levels, Rs 4900 to 5500 per barrel. It has always reached these levels and it has backed off. Having said that, if I were to take a call (on crude), I would buy into it. But I would like to see it gain another 100 points or so.
At present it is looking strong or you could say it at the top range that it was actually hanging on to. Let us see, maybe it will unfold in the course of this week. Q: If you had to map for us the trends for the next six months in the commodity markets, what would your pecking order be? Which would your top three picks be either in terms of precious metals, base metals or even oil for that matter? Barratt: I still like palladium and silver — industrial metals and also precious metals. Trading in silver will get a lift if gold moves up. If we get any form of more stimulus, it will certainly help the precious side of it. But more important, from the industrial side, if we get a lift there and we continue to see some good stories in palladium, then I still feel that white metals will have good move.
I like silver and palladium and I certainly like copper. I think there is really good story developing in copper because I can see commodity imports being in good demand over the next couple of quarters. So they remain the three main picks I am focusing on at the moment. Q: What are your three top picks over the medium-term? Jha: It is difficult at this juncture because the ones I was looking at, silver is looking good. It has kind of retraced and it is consolidating, so I would like to see it move up a little bit.
Gold is an area that I would like to buy into. I have this feeling that crude may move up. So I would go with crude as well.