Gold, silver prices in check

After an initial up move in the beginning of April, gold prices both internationally and in domestic markets have remained largely subdued.

The gold price at Comex dropped to a near four-month low towards the end of April 2019, driven primarily by the strength in the U.S. dollar and the strong undertone in the global equity markets. The flow of better-than-expected economic data from the U.S. and China also played a key role in keeping the gold and silver prices under check in April.

Comex gold ended the week at $1,279.2 an ounce and silver at $14.91 an ounce. At MCX, gold futures settled at ₹31,453 per 10 gm and silver ended at ₹37,423 per kg.

Based on the recent price action, the short-term outlook for gold and silver is not too positive.

The price of gold at Comex is likely to be confined to the recent trading range of $1,260-$1,290 range in the next few weeks.

A decisive breakout past this range is a prerequisite to impart some momentum in the direction of the price breakout. Until then a range-bound action within this price zone is anticipated.

The short-term outlook for silver is slightly weak in comparison to gold. A drift to lower levels of $14.10-14.20 is likely. A break below $14 is likely to impart further weakness and a subsequent fall to $13.50-13.60 cannot be then ruled out.

The upside for silver is likely to be capped at $14.80-$15 an ounce. A move above $15.10 is required to invalidate the negative outlook for silver.

Domestically, MCX gold is likely to ease to the immediate support at ₹30,650-30,900 per 10 gm.

A move past the immediate resistance at ₹31,900 would invalidate the short-term negative outlook for gold.

MCX silver too is likely to seek lower levels. A fall to the immediate support level of ₹36,000-36,100 per kg, is likely.

A move above ₹37,900 per kg is required to infuse some upside momentum to the MCX silver price.

(The author is a Chennai-based analyst/trader. The views and opinion featured in this column are based on the analysis of the short-term price movement of gold and silver futures at COMEX & Multi Commodity Exchange of India. This is not meant to be a trading or investment advice. The author shall not be held responsible for any outcome based on the decision taken on the view / opinion furnished in this column)

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Printable version | Sep 23, 2020 10:17:38 PM |

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