The uptrend in Comex gold witnessed in August, spilled over to September as well. The price of Comex gold scaled to a new all-time high and has settled well above the psychological $2,600-level. The weakness in the U.S. Dollar along with the interest rate cut in the U.S. played a key role in pushing the precious metals to higher levels in September.
Geopolitical risks
The growing geopolitical risk played its part too in bolstering positive sentiment towards precious metals. As a result, both Comex gold and silver closed on a strong note last month. Comex gold gained 5.2% in September to settle at $2,659.4 an ounce. Comex silver notched up an impressive 7.9 per cent gain in September to end the month at $31.46 an ounce.
Firm local trends
Reflecting the firm trend in the global markets, precious metal prices closed on a strong note in the domestic markets too. MCX gold gained 4.9 per cent in September and closed at ₹75,617 per 10-gram. MCX silver, too, closed on a positive note gaining 6.37% in September to settle at ₹90,641 per kilogram.
As anticipated last month, the Comex gold price remained on an upward trajectory and also reached the then-mentioned target zone of $2,620-2,650. The medium-term outlook remains positive and Comex gold price could head to the next target zone of $2,720-2,750.
The positive outlook for Comex gold would be under threat only if the price closes below the support zone at $2,300-2,310. Until the price drops below $2,300, it would be reasonable to expect the price to reach the target of $2,750 and beyond.
While Comex gold is trading near its all-time highs, Comex silver is still stuck within the range of $26-32.5. It is however positive to note that the price is heading closer to the breakout level of $32.5 and a move above this level could impart momentum to the upside. Silver price could then head to the next target zone at $35-$35.5.
The positive outlook for Comex silver would be invalidated on a fall below $28.
In line with last month’s expectations, MCX gold price moved higher and also reached the then mentioned target of ₹73,900-74,500. The short-term outlook for MCX Gold is positive and the price could move higher to the next target zone of ₹77,300-77,800. A fall below ₹75,000 would invalidate the short-term positive outlook.
Similar to MCX Gold, MCX silver too exhibited strength in September. The price also reached the target zone of ₹89,700-91,200 mentioned last month. The short-term outlook for silver remains positive and the price could head to the next target zone at ₹95,500-₹96,500.This view would be invalidated on a fall below ₹88,000.
To summarise, the short-term outlook for precious metals remains positive until the downside levels mentioned above are invalidated.
(The author is a Chennai based analyst / trader. The views and opinion featured in this column is based on the analysis of short-term price movement in gold and silver futures at COMEX & Multi Commodity Exchange of India. This is not meant to be a trading or investment advice.)