Commodities loses its charm in the recent weeks: Angel Commodities Broking

Mr. Prathamesh Mallya (Chief Analyst - Non-Agri Commodities & Currencies, Angel Commodities Broking):

"Commodities as an asset class seem to have lost its charm in the international as well as domestic markets with gold and silver losing around more than 2 percent and 6 percent respectively while crude oil has declined by around 4 percent in the same time frame. The weakness has continued today also with fall across all the commodities including base metals.

Rising interest rate scenarios in the western world, optimistic US economic data and low investment demand are push factors for precious metals to head lower while high inventories in the US and higher exports by the OPEC nations are deterrent factors for price fall in the commodities.

The weakness will be continued in the coming trading sessions with gold on the MCX falling towards Rs.27200 per 10 gms while silver (SEP CONTRACT) prices will further correct towards Rs.35200/kg. Oil prices will fall towards Rs.2750 per barrel mark in the near term. Copper will also move lower towards Rs.370mark on account of increase in inventories on the LME in the past week itself.

Overall, don't be a buyer in commodities; further pressure on prices can be witnessed."

Source : Equity Bulls

Keywords