The first month of the year 2024 turned out to be an uneventful one for precious metals. Both gold and silver witnessed range-bound price action in January. The strength in U.S. dollar and the recovery in the equity markets dented sentiment towards the precious metals. It was, however, positive to note that the Comex gold price managed to sustain above the psychological $2,000 level throughout the month.

Comex gold closed 0.68 per cent lower in January to end at $2,057.7. Comex silver witnessed a relatively steeper cut of 4.02 per cent in January to settle at $23.06 an ounce at the end of January.

Mirroring the trend in the global markets, MCX gold closed 1.27 per cent lower in January and closed at ₹62,746 per 10-gram. MCX silver closed 2.89 per cent lower at ₹72,252 per kilogram.

Confined to range

Comex gold price has been confined recently in the $2,000-2,100 range. A decisive breakout from this range is required to set the tone for the next big directional move in gold. Above $2,100 the Comex gold price could head to $2,150-$2,160 zone. A fall below $2,000 would be a sign of weakness and could push the price to $1,930-$1,940 zone.

Comex silver is yet to breakout of the $21.9-$26.4 range that it has been confined to in the past couple of months. Only a breakout of this range would trigger the next big move in silver. Until then expect volatile price action within this range. A fall below $21.9 would be a sign of weakness and the price could then slide to $19.8-$20.

Mirroring the global trend, the price action in MCX gold was devoid of any trend. The price is stuck in the range of ₹61,300-64,200. A move above ₹64,200 would impart momentum to the upside and the price could then head to ₹65,500-66,000. A fall below ₹61,300 would be a sign of weakness and could push the yellow metal’s price to lower levels.

The MCX silver price is still confined in a broad range and this range has contracted in January.

The price range has shrunk to ₹70,700-74,000 zone in the past few weeks. The short-term price movement would hinge on the direction of the breakout from this range.

A move above ₹74,000 would be a sign of strength and could push the price higher to ₹76,500-77,500.

A fall below ₹70,700 would impart weakness and could push MCX silver price to ₹68,000-68,500. Until the price breaks out of the above range, expect volatile range-bound price action to persist.

To summarise, expect range-bound and volatile price action to persist in precious metals. Only a breakout from the prevailing range would lead to any meaningful move.

(The author is a Chennai based analyst/trader. The views and opinion featured in this column are 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)