Precious metals remained broadly range bound in July. After a distinctly weak performance in June, Comex gold managed to close in the green.
The U.S. Federal Reserve’s dovish stance on interest rates and the soft trend in the U.S. dollar helped gold prices recover in July. Comex gold gained 2.6% to close at $1,817.2 an ounce. But Comex silver lost 2.5% to $25.45 an ounce.
Mirroring the global trend, MCX gold futures gained 1.9% to close at ₹48,001 per 10 gm. MCX silver futures closed 1.8% lower at ₹67,847 per kg.
The short-term outlook for Comex gold is positive. The price may rise to the immediate target range of $1,870-1,880. A move past $1,837 would confirm the positive outlook. This outlook would be under threat if the price closes below the immediate support at $1,740-1,750. Until this is breached, there would be a case for a move to $1,880 and higher. A drop below $1,740 may impart weakness and the price could then slide to $1,650-1,660.
The price of Comex silver has been confined to a range and the near-term outlook depends on the direction of the breakout from this range. A move above $26.8 would be a sign of strength and may propel silver price to the next target of $27.5-28. However, a fall below $24 would be a sign of weakness and it could then slip to the downside target of $22-22.5.
Though MCX gold closed on a positive note in July, the price is still confined to a range. The short-term outlook hinges on the direction of the breakout from this range. A move above ₹49,000 would be a sign of strength and it could then rise to the major target at ₹51,250-51,300. A close below ₹47,300 would be a sign of weakness and could push the price to ₹43,500-44,000.
The near-term outlook for MCX silver is negative. It could slide to the immediate target range of ₹63,000-63,500. This view would be invalidated if the price moves above ₹70,00-70,500. A close below ₹65,900 would strengthen the case for a slide to ₹63,500 and lower.
To summarise, the short-term outlook for precious metals is unclear. A breakout from the levels mentioned would influence the direction of the short-term move.
(The author is a Chennai- based analyst / trader. This is not meant to be trading or investment advice)