In an interview to CNBC-TV18, Ashok Mittal, CEO of Emkay Commodities spoke about the current trend in commodities market.
Below is a verbatim transcript of the interview:
Q: How would you approach bullion going into that Federal Open Market Committee (FOMC) meet today?
A: We are expecting that there will be a lot of pressure on bullion prices , although they have moved up little bit in the last few sessions largely in India because of the weakening of rupee. We think that USD 1400 per ounce remains a strong resistance for gold. Hence we are recommending to sell it at any upside towards USD 1375-1385 per ounce. We expect gold to come back around USD 1320 per ounce or so. Once USD 1320 per ounce breaks then we can expect further downside.
In the Indian market, Rs 28,100-28,200 per 10gm is a selling level and we expect it to come back to Rs 27,500 per 10gm and maybe lower than that.
People will be looking at what Ben Bernanke says because although we do not expect them to say that this USD 85 billion bond buying will be stopped but they might put some kind of conditions on that. If there is any kind of condition then obviously there will be further pressure on bullion prices. So overall the prices will remain under pressure.
Similarly, for silver also we think that USD 22 per ounce is a resistance and we can sell there and we expect silver prices to fall back.
In rupee terms we expect silver prices to fall somewhere around Rs 42,500-42,800 per kilogram range. So we should sell both gold and silver on the uptick.
Q: There seems to be reports that money is flowing back into crude now as an asset class, how would you trade that particular commodity and at what kind of targets?
A: We expect that the broader long-term range for nymex crude oil will be somewhere around USD 80-100 per barrel approximately. We are on the higher band on that technically. We expect that around USD 100 per barrel Nymex crude should get strong resistance .
Today the data will be out and we expect that inventories will be lesser, we cannot see some kind of uptick happening. But overall inventory levels are quite high and right now the tension in Syria is something which is driving the prices on the higher side. Economic outlook is changing drastically, where we see a lot of demand coming in. There is a lot of supply available and there is no such thing that Organization of Petroleum Exporting Countries (OPEC) will cut down on the production side as well.
So our idea is that for short-term we might see some uptick happening but we do expect that crude oil prices also will not be rising too much and we can sell them maybe at some uptick when we see today’s data and we expect that Nymex crude should come back to around USD 95-94 per barrel.