Gold shines brighter

After subdued price action in November, the of price of precious metals recovered and closed on a positive note in December 2019.

Comex gold gained about 15% in 2019, which is the biggest annual gain since 2010. The international gold price gained 3.4% in December to close at $1,523.1 an ounce. Comex silver rose 5.6% to settle at $17.92 an ounce.

In India, the price of gold futures at MCX gained 2.8% in December to close at ₹39,108 per 10 gm. MCX silver futures too ruled firm and gained 4.9% in December to end at ₹46,711 per kg.

The year 2020 has begun on a positive for precious metals as mounting tensions in West Asia stoked positive sentiment. Gold price jumped to an almost 7-year high a few days ago, before easing off in the last couple of days.

After several weeks of consolidation, the price action in the past few weeks indicates that precious metals have regained their sheen.

Gold shines brighter

The short-term outlook for Comex gold is positive and the price could rise to the immediate resistance of $1,625-1,630 an ounce.

The recent spike in Comex gold has, however, pushed the price to an overbought zone. This could trigger consolidation or a cool-off before the next leg of the up-trend resumes. A breakout past $1,575 would indicate that the cool-off phase is over, and the price could then head to the target of $1,625. The outlook for gold would be positive until the support at $1,480-1,485 is not breached. The short-term outlook for silver is bullish too. A breakout past the immediate resistance at $18.6 would strengthen the positive outlook for silver. Above $18.6, Comex silver could rise to its short-term target of $19.4-19.5 an ounce. The short-term positive outlook would warrant reassessment on a close below the support level at $17.2.

Outlook for MCX gold and silver too appears positive. Gold futures price at MCX is likely to rise to the short-term target of ₹41,600-41,800 per 10 gm. The positive view would be under threat if the price falls below the support zone at ₹38,600-38,800.

Silver price could move to the immediate target in the ₹48,900-49,500 zone. There is strong support for silver at ₹44,500-45,000. A close below ₹44,500 would invalidate the positive outlook and could push MCX silver price to ₹42,500-43,000 per kg.

(The author is a Chennai-based analyst/trader. This is not meant to be trading or investment advice)

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Printable version | Feb 26, 2020 11:00:01 AM |

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