Anand Rathi Comm sees aluminium outperforming this yr

In an interview with CNBC-TV18, Kishore Narne of Anand Rathi Commodities gave his strategy on gold, aluminium and copper.

Q: You got a sell on gold this morning?

A: Yes. Probably I am looking to sell on a break down not at the current level but probably below Rs 18,330. In a break down below that one can see weakness coming into gold towards Rs 18,250 or even Rs 18,200-Rs 18,185 levels. Primarily it is trading in a large range of around Rs 18,150-18,200 and Rs 18,500 to Rs 18,600 which is the trading range. Largely there is no macro trend as of now but we are trying to play into the intraday swings. Right now a breakdown below Rs 18,330 can cause weakness for the day.

Q: This is beginning to look like an uptrend for crude though or is that well a swing call?

A: Yes. It has been a fairly range bound market from USD 70 to USD 80. It has been moving for a long time. In India probably around Rs 3615-3620 should be a good buy right now and look for targets of around Rs 3650 or maybe Rs 3680 and that should be toping at around USD 78-USD 78.50 levels on international markets.

Q: What about aluminum?

A: Chinese production of aluminium has dipped by around 0.6%. Though it is a mere dip but what happens is the production cost of aluminium comes to around USD 1650. China, who is the largest producer, there the costing is below USD 2,000, with that the profitability becomes very difficult for the smelters there. The recent prices of around USD 1900-1950 have discouraged a lot of smelters. I feel that aluminium will outperform in the entire year and it remains my pick from the space for the entire year. We can see around 20% upside in the coming six months or so.

Q: How would you trade copper then?

A: We are trying to buy copper today on the basis of record output of refined copper in China which is also boasting some sentiments on the GDP numbers also. With a positive data and a positive outlook on the euro, we are trying to buy around Rs 310-311 levels and we are also looking for intraday target of around Rs 314 or Rs 316 on higher levels.