'Silver demand to remain low'
Sumeet Bagadia, Head (Commodity and Currency Research), Destimoney Securities spoke to Jinsy Mathew on commodity outlook and the Indian rupee
How do you see precious metals like gold and silver panning out in the days ahead?
Gold will continue to be a safe-haven because of the euro-zone crisis. One can buy on a correction till Rs 28,500 - 28,300 levels, for a target of Rs 30,000 and above. However, for silver, this is not the case as it has more of an industrial demand than investment demand. Given the current situation, the demand for silver is expected to remain low. In fact, if the euro-zone crisis continues for a longer time, silver prices can touch Rs 48,000 levels. We are bearish on silver and any rise in prices till Rs 56,000 should be used as selling opportunity for a target of Rs 52,000 and Rs 48,000 in next two - three months.
What about the Rupee? Do you expect it to touch 57 levels to a dollar?
Given the situation, the probability of rupee breaching 57 again is quite high. At present, it seems that after a sharp upside rally in USD-INR, now it’s time where prices need to consolidate and give some correction from present levels till 55 levels. If the rupee nears 55 levels, one can go short for the target of 57. We expect rupee to depreciate in short-term.
Do you expect a further fall in crude oil prices in the coming days?
Yes, we have been bearish in crude oil from $105 in Nymex and continue to hold the same view for next few months. Since the fall was very sharp, there can be some relief rally, but the overall view remains bearish. Any rise in prices till Rs 5,200 in MCX should be used as selling opportunity for a target of Rs 4,950 and Rs 4,800. As far as Nymex Crude is concerned, it can touch levels of $87 and $84 in the next few weeks.
Jeera futures prices have seen some downward movement. Do you think this trend will continue?
Technically, the prices are moving in downward direction from past few weeks. And have a major support at Rs 11,300 levels. As the downside move was very sharp, there can be some pull back in prices till Rs 13,000 – 13,500 levels, but the overall scenario still looks negative. A rally in prices till rs 13,500 Rs should be used as selling opportunity for a target of Rs 12,400 and Rs 11,300 levels.
How do you see lead prices moving in the near-to-medium term?
Lead is showing a downward trend with prices correcting from the high of Rs 114.80 to Rs 105 levels. Now, it’s time where prices need to consolidate and move in sideways range. So, for the short-term i.e. for next 10 to 15 days, the prices will move in a range of Rs 10 to 12. On lower side, lead has support at Rs 103 levels and faces resistance at Rs 114 levels. In the long-term, we expect lead prices to move down and touch levels of Rs 95 and Rs 88. We will remain bearish till the time prices are trading below Rs 114. A rise in prices till Rs 110 – 112 should be used as selling opportunity for the target of Rs 95.
Soybean prices have plummeted over the last couple of weeks. Do you think the rally is over?
The rally is not over yet; this is just the correction of sharp up move, which we had seen in past few months. We feel that soybean is looking bullish on the charts and has potential to touch levels of Rs 3,600 - 3,800 soon. Any dip in prices till Rs 3,200 should be used as a buying opportunity for a target of Rs 3,600 in next one month.
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