The Hindu Business Line : Crude likely to be bullish, gold weak

Ms Rajini Panicker of Man Financial says she is bullish on crude and, therefore, crude on decline would remain a buy. She also says in the next couple of weeks the trend for gold will be weak.

Excerpts from CNBC-TV18's exclusive interview with Rajini Panicker:

We have seen crude at $77 in the last couple of days and $80 is what the street seems to agree on? What is your call on the matter?

We are also of the opinion that crude will continue to remain supported because of the British Petroleum issue that has come up now and despite the weakness in precious metals and base metals, we have seen crude well supported. So we are of the opinion that it should tread higher. An immediate upside target that we are looking at is $78 a barrel.

Can you put into perspective what the Fed's statement actually means for the commodity market because it affects bond , foreign exchange and equity markets quite directly. How strong are the linkages with the commodity markets?

Precious metals definitely look at Federal Open Market Committee (FOMC) statements very closely and the scenario that has played out on Wednesday is something that we have discussed. But the statements after that could come in hawkish, and that is exactly what has played out. They have come out with a statement that says, "inflation risk still remains." Therefore, one is seeing precious metals, despite a pause in interest rate trending lower, opening weaker today as well. So this room of uncertainty that they have left open, probably till the next FOMC meeting, will weigh down on precious metals. And we think that in the next couple of weeks the trend will be weak for gold, whereby we look at the October gold targeting levels of $600-$614.

On the crude front, what strategy would you adopt?

As I said, we are bullish on crude, so on declines it remains a buy whereas if one looks at precious metals as a pare kind of trade, then it would be a sell at current levels.

What is your target for silver and for hard metals?

We would be looking at silver at $12.

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