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Gold going strong, silver on a song

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Domestically, both gold and silver prices touched record highs in August.

August turned out to be a strong month for precious metals with gold hitting a six-year high in the international market. Comex Gold futures gained close to 7% while silver rose by about 10% in August. The rally was fuelled by fragile sentiment over the global economy and growing concerns about the trade-war between the U.S. and China. Expectations of lower interest rates also played a part in fuelling the uptrend.

Comex Gold futures settled at $1,529.2 an ounce while Comex Silver futures ended August 2019 at $18.3 an ounce.

In the domestic market, the price of gold futures at MCX rose about 12% in August to close at ₹38,677 per 10-grams. MCX Silver futures, too, gained almost 12% to settle at ₹47,760 per kilogram by the end of August.

The short-term outlook for Comex gold and silver is positive. Any short-term weakness would be an opportunity to enhance exposure in precious metals. Comex gold has support at $1,490-1,500 zone. The short-term outlook would be positive if Comex gold holds above the negative trigger level of $1,480. A move above the minor resistance at $1,560 an ounce would be a sign of strength and could propel Comex gold to the short-term target of $1,585-$1,590.

Gold going strong, silver on a song
 

The outlook for silver is no different from that of gold. The short-term support for silver is in the $17.5-$17.7 range. The short-term outlook would turn negative if the price closes below the support-cum-negative trigger level of $17.3 an ounce. Until $17.3 is breached, there would be a strong case for a rise in silver price to the immediate target zone of $19.4-19.8.

Domestically, both gold and silver prices touched record highs in August. The outlook for MCX gold and silver appears positive. The gold futures price at MCX is likely to progress to the immediate target of ₹39,700-40,000 per 10-grams. The positive view would warrant a reassessment only if the price falls below the support zone of ₹37,200-37,500 per 10-grams.

The outlook for silver at MCX is positive too and a move to the immediate target of ₹49,800-₹50,500 appears likely. MCX Silver has strong support at ₹44,500-45,000 zone. Until this zone is breached, there would be a strong case for a rise towards the target of ₹49,500.

To summarise, the short-term outlook for precious metals remains bullish. Until there is evidence to the contrary, any price weakness is likely to be an opportunity to add exposures in precious metals.

(The author is a Chennai-based analyst / trader. The views and opinions featured in this column are based on the analysis of short-term price movements in gold and silver futures at COMEX and Multi Commodity Exchange of India. This is not meant to be a trading or investment advice.)

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Printable version | Apr 5, 2020 12:44:35 AM | https://www.thehindu.com/business/gold-going-strong-silver-on-a-song/article29310553.ece

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