After a sharp fall in September, the precious metals regained their lost luster in October. Weakness in the US dollar as well as concerns over rising inflation played a key role in closing the precious metals on a positive note in late October.
Comex gold rose 1.5% to $1,783.9 an ounce at the end of October. Comex silver also closed strongly. The white metal was up 8.6% at $23.95 an ounce.
In the domestic market, MCX gold futures closed 2.4% higher at Rs 47,635 per 10 grams. Silver futures on MCX rose by 8.3% to close at Rs 64,534 per kg.
Comex gold price recovered marginally in October after a sharp fall in September. However, this has not changed the overall weak outlook for the yellow metal. Comex gold is likely to slip in the range of $1,660-1,670 till the price moves above $1,840.
A decline below $1,750 would strengthen the case for a slide to the $1,660-1,670 range. In short, either a move above $1,840 or a decline below $1,750 will set the tone for the next move in Comex Gold.
As predicted last month, Comex silver price corrected. However, the recovery did not help the price cross the key $25 resistance area. A move above $25 would be a sign of strength and could help the white metal to move towards the next target of $26.75-27.50.
A decline below $22.8 would be a sign of weakness and could push silver price towards the $20.5-21 low. The short-term trend in Comex silver hinges on a downside break above $25 or below $22.90.
The short term outlook for MCX Gold is positive and the price may move towards an immediate target of Rs 50,500-51,000. A move beyond ₹48,300 would confirm a positive outlook. If the price goes below Rs 46,200 then it will be in danger. Unless this level is breached, there will be a strong case for a move up to ₹50,500.
The short term outlook for MCX Silver is positive and will be confirmed once it crosses ₹67,000. A move above this level may help MCX Silver move towards the next target of ₹70,000- ₹70,500. Positive Attitude ₹61,500. Will be in danger if closed below
In short, the short-term outlook for the precious metals is mixed. A further move from the above mentioned levels will impact the next major directional move in Gold and Silver. In the domestic market, there is a possibility of a rally in the precious metals for some time.
(The author is a Chennai based analyst/trader. Not meant to be trading or investment advice)
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