Page 7 - Value Plus Jan 2016

COMMODITIES-

WILL IT BE
A SWEET ‘16?

The year 2015 will be remembered for
effective continuation of the primary bearish
trend in commodities that started to emerge
in late 2011 and gained strong foothold
in next couple of years. Be it Gold, Silver,
Crude Oil, Copper or Natural Gas, bears left
an overwhelming impact on trade. For agro
commodities, 2015 was another roller coaster
ride and there was no unanimous trend
following. Let us check how sweet will be
the New Year turn out to be:

BULLION ENERGY BASE METALS AGRO COMMODITIES

Gold is expected to Crude oil may break Copper is expected to Turmeric is likely to lead spices
extend its southward below its crucial support face another bearish segment as the therapeutic
journey as the prices of $32 and may extend the tsunami in 2016. As commodity has a high voltage
are already in a long fall in the range of $28-$25 for Nickel, the worst is presence on technical chart coupled
term primary bearish in the first half of 2016 still not over. Both of with an exciting high demand at
trend. It won’t be which means that we the base metals have fundamental level. Prices may touch
surprising to see tumbled with the rout higher levels of Rs 11000-Rs 13000
gold trading in the may see prices crushing in Chinese markets. per quintal. Dhaniya and Jeera are
range of $950 to $900 Fundamentals in the likely to remain range bound to
in 2016. In Indian below Rs 2000 in Indian largest market, China negative in first quarter. Positive
markets. It is clear that don’t seem to improve trend will start only in second half
market, we may still a big chunk of bearish in near term that further of the year. In soy complex, Soybean
trend is remaining and confirms the bearish & Mustard seed may regain
see prices sliding buying will come only trend. Aluminium, Zinc momentum in next couple of weeks
after prudent growth and Lead will also see since both the commodities are
towards Rs 23000- emerges outside US or if broadly in a positive trend. Soybean
22000 range. Silver OPEC decides to end the some selling pressure may reclaim Rs 5000 level with soy
is also likely to shed tussle with US by going
another 10-15% and for a production cut. but will find takers oil following the suit for a target
find a support at $11. However, any disruption
in Iranian crude oil as they are better on of Rs 850 while Mustard seed can
In Indian market, supply or any geopolitical fundamental level. Any touch Rs 6500 mark post June. Guar
tension may provoke new announcement from complex is also likely to perform
prices may see a short covering which may China regarding easing positively from here. Since prices
shape into a relief rally. policy may provide a are at a comparatively lower level
downside range Natural Gas prices are temporary support to against upcoming demand, buying
likely to recover strongly metals. Copper is likely may take a sharp rise. Guar seed
of Rs 30000-27000. in first half of 2016. We may display a huge rally above
However, Silver to trade below Rs 300
is likely to get the may see a quick rally for most part of the Rs 3500 with a target of Rs 7000
benefit of being year whereas Nickel is
a semi-industrial towards Rs 225-Rs 260 whereas Guar Gum will go strong
commodity. So, if feared to break below
industrial growth range once prices break above Rs 7000 with a target of
outside U.S. starts above Rs 180. Prices may psychological support of Rs 11000 for the year.
picking up in second take a U-turn in post June Rs 500 anytime soon.
half of 2016, it will get period.
an edge over gold in 7 ARIHANT CAPITAL ¡ JANUARY 2016
terms of investment.