Even as German IFO numbers and the Eurozone industry orders are all very bad numbers, both Euro and GBP (pounds sterling) trading at day’s highs is what is supporting the commodities.
Alex Mathew, Head of Research, Geojit Financial Services, advises to buy gold at current price with a stoploss below Rs 12,850 per 10gm. “Our short-term target is Rs 13,300 per 10gm or it can even move towards Rs 13,400 per 10gm in another one–two days.”
According to him, USD 48.25 per barrel is an important level for crude. “If crude falls below USD 48.25 per barrel, we may see some more sell-off that can bring crude oil towards USD 44-46 per barrel even though there are strong rumours that OPEC will cut production.” He recommends selling crude around Rs 2,765 per barrel levels and placing stoploss well above Rs 2,720 per barrel. The short-term target is Rs 2,790 per barrel or it can even come down to Rs 2,575 per barrel levels, he added.
Here is a verbatim transcript of the exclusive interview with Alex Mathew on CNBC-TV18. Also watch the accompanying video.
Q: We have seen an immense jump happen in case of gold in the last couple of hours, how do you read all this?
A: The short outlook of gold remains positive especially above USD 801 per ounce or even at USD 794 per ounce. Importantly, today, it has reached the 50-day moving average (DMA) of USD 799 per ounce. If gold can manage to close consecutively for two days above USD 799 per ounce, it definitely can move to 100 DMA — USD 830.7 per ounce — or even it can move towards the 200 DMA of USD 873.6 per ounce.
So in the short term, I am expecting that gold may definitely touch the 200 DMA in the international market because of high demand and due to wedding season. Domestically as well, one can take long positions. Buy gold at current price with a stoploss below Rs 12,850 per 10gm and comfortably at Rs 12,726 per 10gm. Although prices have already moved up but still one can buy with a stop loss below Rs 12,850 per 10gm.
Our short-term target is Rs 13,300 per 10gm or it can even move towards Rs 13,400 per 10gm in another one–two days.
Q: Crude is around USD 50 per barrel and hasn’t been able to stay above that level successfully?
A: In crude, the major trend is down because the major exponential moving average (EMA) I am looking at is at USD 55.27 per barrel and so below that, it is weak. In the short term, it is still below the 10-day EMA of USD 50.30 per barrel. So, it is trading at USD 50.01 per barrel and is likely to test USD 48.25 per barrel and that is an important level I am looking at.
If crude falls below USD 48.25 per barrel, we may see some more sell-off that can bring crude oil towards USD 44-46 per barrel even though there are strong rumors that OPEC will cut production. We will not have much impact on crude even today.
So, we recommend selling crude around Rs 2,765 per barrel levels and one can place stoploss well above this Rs 2,720 per barrel. The short-term target is Rs 2,790 per barrel or it can even come down to Rs 2,575 per barrel levels.
Q: There have been good gains in case of copper — well trading 5% on the higher side on LME. Is it good time to buy copper?
A: Short-term reversals are there. China’s import of refined copper closed nearly 31.5% on year and 14.9% on month of October and that will have a positive impact. Again, the Sterlite Industries Chennai unit has been closed for a few days and that is also giving some support to copper. So, one can buy copper around Rs 188 per kilogramme, the February contract, with a stoploss well below Rs 184 per kilogramme. In the short term, it can possibly test Rs 194-197 per kilogramme.
