Helped by the Russia-Ukraine conflict, Comex Gold posted its biggest quarterly gain since September 2020. Concerns over rising US inflation rates also played a role in strengthening sentiment.
Comex gold closed 2.8% higher at $1,954 an ounce in March. Comex silver outperformed slightly, up 3.2% to close at $25.13 an ounce. Looking at the global trend, MCX gold futures closed 2.4% higher at ₹52,166 per 10 grams. MCX silver futures closed 2.4% higher at Rs 67,487 per kg.
Comex gold has outperformed the second target of $2,025-2,030 set last month. After hitting a high of $2,078.8 in early March, gold price has cooled down and has been confined to a trading range over the past few days. A breakout from this range will set the tone for the next move.
A move beyond $1,970 could lead to Comex gold moving towards $2,015-2,025. On the other hand, a decline below $1,855 would be a sign of weakness and could push the price lower towards the key support levels at $1,835-1,840.
Comex silver also remained firm and reached the target of $ 27.75-28.8 stated last month. The short term outlook depends on the price action in the near term. A move above the $26.5 resistance level would be a sign of strength and the price could then reach the $27.50-28.50 area.
Conversely, a break below the $23.8 support level would be a sign of weakness and Comex silver price could then decline towards the $21.5-22.5 area.
In line with the international price, MCX Gold also surpassed the target price of ₹53,500-54,500 mentioned last month. Short term outlook is positive and a move towards ₹54,100-54,600 is likely. This view will be valid if the price crosses ₹52,400. A fall below ₹49,800 will invalidate the positive outlook.
MCX Silver also managed to hit the target area of ₹68,500-70,100 mentioned last month. Recently, there has been a sharp decline in the price of silver in the domestic market. Only a close above ₹70,100 will restore positive momentum. Otherwise, the price may either go down or remain confined in the range of ₹64,000-70,000.
In short, the precious metals are in a cool-off phase after a sharp rise in the early part of March. The short-term outlook depends on the breakout of the trigger levels mentioned above. It would be prudent to wait for the price to break out of these levels before making conclusions about the direction of the next move.
(The author is a Chennai-based analyst/trader. Not meant to be trading or investment advice)