Kishore Narne on commodity outlook

Gold saw some pullback after the fall on Friday to close at USD 1615. Volatility was missing as the US markets were shut for President Day celebrations and China has just returned back after the lunar vacation.

"We maintain our bearish bias on gold, and pullback towards USD 1620-1625 should be used as opportunities to build shorts again,'' Kishore Narne, associate director & head - commodity & currency, Motilal Oswal Commodity Broker said.

''We continue to advised selling April silver mini in trenches from 57962 till 58850, which also saw gains as prices tanked on Friday with the fall in euro. We still remain bearish on silver and would sell on pullback towards 57900 for short term targets towards 57100-56500. We expect silver to head towards 55700 on a medium term basis.''

Copper and Nickel traded weak after China returned from the lunar new year holidays. Both closed close to crucial supports of 442 and 970 respectively. "If Copper sustains below 441, we can expect more downside towards 437-432 and Nickel below 965 and head towards 950-935 levels.''

Base metals tanked against expectation of restocking from China once they are back from the Lunar new year holiday. However, copper fell more than a percent in Shanghai on Monday along with deeper correction in London copper, as traders played catch up after a week-long holiday, with metals weighed down by weaker global growth cues including a deeper-than-expected recession in the euro zone. "We remain cautious after yesterday's move and wait for some more clarity over the future direction of metals,'' he said.

''USD closed flattish on Feb 18, 2013, after some early morning gains. It has managed to close above a resistance of 54.10 and is currently at 54.18. We would stay cautious and watch from sideline till further clarity emerges as all eyes are on the budget scheduled at the end of the month. Today the currency market will be closed on account of Shivaji Jyanti. We have suggested a short straddle of 53.50 strike on 7-Feb which is 14 paisa out of the money and we suggest to hold on to it towards expiry,'' he saidon currency.

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