Gold, silver surge on West Asia, U.S. Fed stalemate
The short-term outlook for both gold and silver is positive; while Comex gold could consolidate in the near term, silver looks relatively strong and could continue its short-term uptrend soon
After a strong performance in March, precious metals edged higher in April. Aided by geopolitical tension in West Asia and rising demand from central banks, Comex gold breached the psychological $2,400 per ounce mark in April.
The de-escalation of tensions in West Asia along with the dent in the prospects of an interest rate cut in the U.S., led to a cool o in precious metal prices in the latter half of April.
Comex gold gained 1.88% in April to settle at $2,297.3 an ounce. Comex silver posted a much healthier gain of 5.86% to end at $26.57 an ounce.
Mirroring the trend in the global markets, MCX gold closed 4% higher in April and closed at ₹70,466 per 10-gram. MCX silver closed 5.7% higher at ₹81,310 per kilogram.
Comex gold continued its uptrend in April and also achieved the target zone of $2,295-$2,320 mentioned last month. After reaching an all-time high of $2,448.8 on April 12, the price has cooled o in the past few weeks.
The sharp rise since March has pushed Comex gold price into an overbought region and the price could consolidate in the $2,220-$2,350 zone in the near term.
The long-term uptrend in Comex gold is likely to resume on the completion of the anticipated consolidation. A move past $2,370 would be an early indication of the resumption of the uptrend and the price could then head to $2,450-$2,500.
Silver breakout
Comex silver managed to breakout past its prior range of $21.9-$26.4 range, which is a sign of strength. As observed last month, the breakout above $26.4 resulted in a spike to the target zone of $28.5-$29 zone. The short-term outlook is positive and silver price could head to $27.8-$28.5 in the short-term. A fall below $25.8 would indicate short-term weakness and would result in a delay in progress towards the target zone.
Ruling rm
Mirroring the global trend, MCX gold too ruled rm and reached the then mentioned target of ₹69,200-₹69,800. The short-term outlook is positive, and the gold price could head to ₹72,200-₹72,500 zone.
A fall below ₹69,000 would invalidate this positive outlook.
MCX silver price continued its uptrend April and also hit the target zone of ₹78,200-₹78,600 mentioned last month. The near-term outlook is positive and MCX silver could head to next target zone at ₹83,200-₹83,500. The positive view would be under threat if the price drops below ₹80,000.
To summarise, the short-term outlook for both gold and silver is positive. While Comex gold could consolidate in the near term, silver looks relatively strong and could continue its short-term uptrend soon.
(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.)