Kaushal Jaini of Dani Commodities does not rule out USD 60 per barrel for crude immediately. “If the OPEC meeting allows output to be two million barrels per day, we should expect a bounceback. If there is no outcome from the decision, then it could be still around USD 62 per barrel.”
Here is a verbatim transcript of the exclusive interview with Kaushal Jaini on CNBC-TV18. Also see the accompanying video.
Q: What about crude prices? It doesn’t seem to be holding on higher levels despite the OPEC meeting tomorrow?
A: Crude is going to see further downside because USD 67-70 per barrel is still acting as a major resistance for crude. If the OPEC meeting doesn’t be positive for crude, we can expect crude to head to be around USD 62 per barrel. In the Indian continent, there could be immediate sell levels below Rs 3,400 per barrel. One can target around Rs 3,300 per barrel levels. Everyone is waiting for positive cues out of the OPEC meeting.
Q: So, what kind of gains are you expecting in the markets then?
A: If the OPEC meeting allows output to be two million barrels per day, we should expect a bounceback. If there is no outcome from the decision, then it could be still around USD 62 per barrel. USD 60 per barrel cannot be ruled out on crude immediately.
Q: What to do with gold because we have seen prices go down really quickly? The decline is very sharp, its trading below USD 720 per ounce at this point in time. How much more losses do you expect on that one?
A: Gold has become negative immediately because USD 725 per ounce on the spot chart has been broken. I expect it to test at least USD 650 per ounce. On Indian counters, the first target will be Rs 11,400 per 10 gram. Rs 11,100 per 10 gram could be seen immediately for gold. So, no buying at these levels but only a sell for gold.
Q: So, you see the same for copper or we see some bottom happening there?
A: Copper can be still held at Rs 180 per kg levels, which will be a major support. But it is still negative until a major support of Rs 215 per kg is not breached on the upper side. I would still advice to go short in copper at higher levels and keep a stop loss of Rs 216-217 per kg and Rs 190 per kg on the downside.
Q: What about silver prices because there seems to be some decoupling in case of gold? We have seen gold decline quite a bit but silver still seems to be holding that USD 9 per ounce mark?
A: It is still strong. I hope it doesn’t close below USD 9 per ounce. If it closes below USD 9 per ounce, then it would be a disaster for silver. Speculative selling could emerge for silver below Rs 17,000 per 10 gram. For speculative targets, Rs 16,800 per 10 gram and USD 9.2 per ounce are very crucial levels to watch. It may take silver to USD 7 per ounce over a directional time.
