Gold no more safe haven; may fall to $1450/oz: Commtrendz
After touching its lifetime high of USD 1,925 per ounce in September, gold has fallen over 20%, currently languishing around 1,530 per ounce. T Gnanasekar of Commtrendz Research and Fund Management tells CNBC-TV18 that he believes the price of gold will fall another USD 100 dollars in the coming days. “The market is not looking at gold as a safe haven commodity till change comes in the European situation,” he explains.
He further says that demand for physical gold and exchange traded funds (ETFs) continues to be encouraging.
Another commodity that is hurt by the strengthening dollar is crude, and Gnanasekar has a target of USD 90 per barrel for that. “On the MCX, we think Rs 4,975 odd levels could be a good level to sell for a target of Rs 4,850,” he added.
Below is an edited transcript of his interview with Latha Venkatesh and Ekta Batra. Also watch the accompanying video.
Q: Should we be prepared for more fall on gold?
A: Absolutely because headline risk news is bigger than ever. Gold has fallen from its highs, so it gives a sense that the market is not looking at it as a safe haven commodity till change comes in the European situation. Its’ following equity markets and the correlation with equity markets is pretty strong right now. We see it further going down towards possibly USD 1,450 per ounce or even lower than that.
But having said that, physical demand and the ETF holdings continues to be encouraging; we have not seen a big drop in it. So we believe they could return back once it comes near USD 1,450 per ounce.
Q: In rupee terms, a lot of this gain was not available perhaps to a rupee trader because of the fall in the rupee. Is there a gain to be made in rupee terms? How would you trade it on MCX for instance?
A: The very short-term picture still remains sell on rallies purely based on the global picture. But if rupee continues to depreciate the way it has been depreciating, then it’s not a good strategy. Things would remain neutral there, but Rs 27,700-27,800 per 10g thereabouts is a good level to sell for a target of Rs 27,000 per 10g in the very short-term period. But in a slightly medium-term picture, anywhere close to Rs 27,000 per 10g could be achievable.
Q: What would your strategy be on crude?
A: Crude prices are also going to suffer the brunt of the dollar strength. We feel it could go down towards USD 90 per barrel. But overall, demand supply factors are quite positive for crude, except that it is falling because of the weaker dollar. So we think Rs 4,975 odd levels could be a good level to sell for a target of Rs 4,850.
Q: This is intraday on MCX?
A: Yes, probably a couple of days from here.
Original source
He further says that demand for physical gold and exchange traded funds (ETFs) continues to be encouraging.
Another commodity that is hurt by the strengthening dollar is crude, and Gnanasekar has a target of USD 90 per barrel for that. “On the MCX, we think Rs 4,975 odd levels could be a good level to sell for a target of Rs 4,850,” he added.
Below is an edited transcript of his interview with Latha Venkatesh and Ekta Batra. Also watch the accompanying video.
Q: Should we be prepared for more fall on gold?
A: Absolutely because headline risk news is bigger than ever. Gold has fallen from its highs, so it gives a sense that the market is not looking at it as a safe haven commodity till change comes in the European situation. Its’ following equity markets and the correlation with equity markets is pretty strong right now. We see it further going down towards possibly USD 1,450 per ounce or even lower than that.
But having said that, physical demand and the ETF holdings continues to be encouraging; we have not seen a big drop in it. So we believe they could return back once it comes near USD 1,450 per ounce.
Q: In rupee terms, a lot of this gain was not available perhaps to a rupee trader because of the fall in the rupee. Is there a gain to be made in rupee terms? How would you trade it on MCX for instance?
A: The very short-term picture still remains sell on rallies purely based on the global picture. But if rupee continues to depreciate the way it has been depreciating, then it’s not a good strategy. Things would remain neutral there, but Rs 27,700-27,800 per 10g thereabouts is a good level to sell for a target of Rs 27,000 per 10g in the very short-term period. But in a slightly medium-term picture, anywhere close to Rs 27,000 per 10g could be achievable.
Q: What would your strategy be on crude?
A: Crude prices are also going to suffer the brunt of the dollar strength. We feel it could go down towards USD 90 per barrel. But overall, demand supply factors are quite positive for crude, except that it is falling because of the weaker dollar. So we think Rs 4,975 odd levels could be a good level to sell for a target of Rs 4,850.
Q: This is intraday on MCX?
A: Yes, probably a couple of days from here.
Original source
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