Talking about the intense selling pressure that is almost paused the gold rush, Jonathan Barratt of Commodity Broking Services says, he see liquidation all across the commodity space.
In an interview to CNBC-TV18, Barratt indicated that a lot of people who are on a long on US dollar are short on the commodity trade at the moment. "Investors feel that given the lack of confidence in the economies around the world, the commodity space should go lower," he added.
Ritesh Gandhi, senior research analyst of commodity and currency at Anand Rathi Commodities believed that USD 90 per barrel for WTI prices was fairly an important resistance level for crude, but prices have come off sharply from that level.
Going forward, he feels that any rally towards USD 83-85 per barrel would be a strong resistance. "We believe selling pressure will increase at these levels," he explained. Gandhi expects crude prices to slip lower to about USD 75 per barrel for the WTI.
Over the last two weeks, the Opaque, IEA as well as the department of energy in US have lowered their demand forecast for this year and the next.
Further, Barratt said that the safe haven status of the dollar has been also providing impetus for commodities to go lower, whereas, Gandhi said that the strength in the dollar post the FOMC announcement has been also weighing on crude prices.
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