Zinc could gain 10% from here; long on precious metals: SocGen

Considering well-balanced fundamentals, Robin Bhar of Societe Generale is most bullish on Zinc and Nickel in the metals space. Zinc could gain another 10 percent from current levels, he says in an interview to CNBC-TV18.

Bhar says Silver is seeing speculative exaggerated interest due to safe haven buying in gold, even while fundamentals don't support the up move. But in light of global economic and political uncertainties he would still prefer to be long on precious metals space.

He says, it is advisable to stay away from industrial metals like copper and aluminium due to an oversupply situation.  Below is the verbatim transcript of Robin Bhar’s interview to Manisha Gupta on CNBC-TV18.Q: What is your sense that you make of the base metals because most people feel that they have bottomed out and from these current levels we actually could see much more gains?A: I would generally agree with your comments. I think the easing expected by central banks globally, so keeping monetary policy very supportive post the UK’s planned exit from the European Union (EU) should continue to underpin base metals prices. We are more positive towards some of the smaller base metals like zinc, nickel, tin and lead, cautious on copper and aluminium because of steel oversupply in both of those markets.Q: Zinc and nickel is something that really has been gaining up and we have seen a lot of smart hot money move into these couple of metals. How much of a further gain would you see in these?A: I think we can expect some further gradual gains admittedly some of the gains have come too quickly because of being based on some buying speculative activity jumping on the bandwagon. So we should expect maybe prices to maybe level off. I think in the fourth quarter when we should see physical demand picking up after the slow summer period, we could see some further gains particulary in zinc and nickel because of an ongoing supply constraints.We are seeing some closures of zinc mines and in nickel we have the threat of mine closures in the Philippines to add to the already existing export ban by Indonesia. So, we would expect further modular gain certainly in the last quarter of this year.