Correction in the metals pack - An opportunity for longs? - Angel Commodities Broking

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

"FOMC meeting, the crucial and the most important event of the year 2017 is now done with and as per market expectations they have raised the rate by 25 bps.

In anticipation of this event, gold and silver prices have been in a declining spree since the past fortnight and have corrected by 3% and 6 percent as on 13th December 2017. MCX futures gold and silver prices have fallen by 4.5 and 6% in the same time frame.

The fall is also witnessed in all the base Metals in the same time frame with Aluminum and Copper falling 6% and 3%.

Besides, global equities remain at all time highs as the optimism continues with riskier assets providing better returns than commodities.

All said, the year 2018, would see a host of surprises starting from the promises made by Trump with regards to the spending and tax cuts for the US economy, while the nuclear capabilities of North Korea will keep investors attached towards safe haven assets like gold and silver.

Also, the portfolio reshuffling that happens every year will also result in some more correction in the industrial metals as the asset class had a good run-up of more than 20% in 2017. Investors should avoid longs in any of the commodities, whether it is international or domestic."

Source : Equity Bulls

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