Sushil Kumar Sinha, business head (commodity), Karvy Comtrade Limited, spoke to Jinsy Mathew on outlook for bullion, industrial metals and energy. Excerpts:
Gold prices crashed to hit 11-months low. Do you see further downside from the current levels?
Two cumulative quarters show negative performance of gold. For the first quarter of 2013, spot gold registered negative growth of 4.81 per cent, settling at $1,594.30. Predominantly, we expect gold to remain bearish and beyond $1,520 we are expecting huge bearish turn on gold. After 12 years of price rise, we believe a major psychological change was on the way for 2013. For the Indian traders/investors, once Rs 29,000 is breached down, then possibly we are going to witness a huge fall to the levels of Rs 28,000.
What about silver? Is it a buy/sell at the current levels and why?
Silver, too, has witnessed weakness in the first quarter of 2013 and prices declined by 7 per cent to end at 2,842 cents per troy ounce. We expect more downside in silver, compared to gold. From the technical end, we see $26.00 is very strong support level like Rs 50,000 at MCX (Multi Commodity Exchange of India Ltd).
However, we expect on break of $26 or Rs 50,000, the down trend is likely to extend towards $24.50 and Rs 48,000. We recommend selling silver on higher levels for the short-term.
Which are the top picks from the base metals pack and at what levels?
Similar to bullion, the industrial/base metals pack has also declined by more than 6 per cent year-to-date at the MCX. Base metals are generally very prone to global market activities. Copper: It has the potential to hit Rs 380/385 at MCX and below $7,000 mark at London Metal Exchange (LME).
Nickel looks like that it has some more potential to trade down. Stay tuned to Nickel on a bearish trend. We are going to see it testing Rs 830/820 and below $15,000 at LME. Undoubtedly, we may expect to see less bearishness on Zinc and Aluminum, while lead has little more potential to trade down.
We expect Zinc and Aluminum should bottom out near Rs 95/96 on the MCX, while lead can possibly hit below Rs 108/106.
Brent crude saw some significant correction yesterday. What levels do you see crude touching over the next few weeks?
In the first week of April, crude oil prices have come under pressure on concern of lower fuel demand due to sluggish economic growth of the world's major oil consumers. Technically, we are expecting Brent oil prices to remain on the lower side and the expected level is seen at $99.50. Near-term resistances are at $110, then $113.70.
Do you see the rupee depreciating in the near-term?
In near-term, we expect the rupee to remain in a range of 53.80-55.10.
