MC: Crude has support at $50-51/bbl level: Commtrendz Research
T Gnanasekar, Director, Commtrendz Research & Fund Management, feels the range of USD 50–51 per barrel range is a good support for crude, from where it can go up to USD 60–63 per barrel levels. “Let us also remember that we are in heating oil demand season and I will not expect any major fall on the downside,” he said.
Gnanasekar is also bullish on silver, gold and base metals.
Here is a verbatim transcript of T Gnanasekar’s exclusive interview on CNBC-TV18. Also watch the accompanying video.
Q: Let us start with crude because we have seen a range of nearly USD 56-51 per barrel in the day today and the US markets are yet to open. How would you play into this today?
A: The OPEC news came in and that led to some profit taking and sell-off — there is some disappointment on the cuts. Let us also remember that we are in heating oil demand season and I will not expect any major fall on the downside. A range of USD 50-51 per barrel is a good support for a move that can go up to USD 60-63 per barrel levels.
Q: Let us get on to gold then. It is down nearly USD 15 per ounce in the European markets right now. What do you think has led to a sell-off in that commodity?
A: The Eurozone data was not good as the market expected. That led to some kind of a sell-off. The currency would tend to have a good impact on gold. One would see some volatility in gold coming in around USD 785–780 per ounce, which would be a good support on the downside.
But I still have a bullish bias looking at gold going forward in the couple of weeks. So I would look at buying at those levels.
Q: What kind of level are you looking on the higher side?
A: We might be testing close to USD 845 per ounce or USD 865 per ounce on the upside. So, that would be a near-term cap.
Q: There has been a sharp decline in case of silver as well. Last week, we saw gains of nearly 6%. It is nearly given off 3% out of that. What are the levels you are watching out on that one?
A: Silver plays along well with base metals and right now, there is a lot of positive news on base metals from China on lowering taxes and then [there are] chances of having a stockpile of base metals. All this will provide good help for base metals and silver will also be benefited. Keeping that in mind, I don’t expect major falls in silver as well. Around USD 9.78-9.80 per ounce looks to be a good level to buy again.
Q: What about base metals? There is some positive news coming in from China.
A: It could lead to rally from these levels if it is able to sustain and close positively in the next couple of days. Let us also not forget that most of the funds would try to window dress this month. It is year end for many funds, This put together will kind of support base metals. That there could be rally on the upside.
