After recording a strong close in July, precious metals lost their sheen in August, with both gold and silver closing the month on a weak note. The strengthening of the US dollar along with the expectations that the US Federal Reserve will keep interest rates elevated in the near future, played a key role in keeping the precious metal prices under check.

As a result, Comex gold closed 2.1 per cent lower at $1,965.9 at the end of August. Comex silver posted a relatively better performance in August. The white metal closed 0.6 per cent lower to end the month at $24.81 per ounce. Mirroring the trend in the global markets, MCX gold closed on a negative note at ₹59,374 representing a fall of 1.1 per cent in August. MCX silver declined 1.58 per cent last month to settle at ₹75,682 per kilogram.

The price of Comex gold is still confined to the range of $1,910­2,010 that was mentioned last month. A breakout from this range would set the tone for the next directional move. A move past the upper end of the range at $2,010 would have positive implications and could push the Comex gold price to the next target of $2,040­2,050. On the contrary, a fall below $1,910 would be a sign of weakness and could push the price lower to $1,850­1,860.

Similar to Comex gold, Comex silver too is yet to breakout from the range of $22.5­25.5 range mentioned last month. A breakout from this range would influence the next major move in silver. A move past $25.7 would be a sign of strength and silver price could then head to the upside target of $26.8­27.5. A fall below $22.3 could trigger a slide to $2,1­21.2. After recording a strong close in July, precious metals lost their sheen in August, with both gold and silver closing the month on a weak note. The strengthening of the US dollar along with the expectations that the US Federal Reserve will keep interest rates elevated in the near future, played a key role in keeping the precious metal prices under check.

As a result, Comex gold closed 2.1 per cent lower at $1,965.9 at the end of August. Comex silver posted a relatively better performance in August. The white metal closed 0.6 per cent lower to end the month at $24.81 per ounce. Mirroring the trend in the global markets, MCX gold closed on a negative note at ₹59,374 representing a fall of 1.1 per cent in August. MCX silver declined 1.58 per cent last month to settle at ₹75,682 per kilogram.

The price of Comex gold is still confined to the range of $1,910­2,010 that was mentioned last month. A breakout from this range would set the tone for the next directional move. A move past the upper end of the range at $2,010 would have positive implications and could push the Comex gold price to the next target of $2,040­2,050. On the contrary, a fall below $1,910 would be a sign of weakness and could push the price lower to $1,850­1,860.

Similar to Comex gold, Comex silver too is yet to breakout from the range of $22.5­25.5 range mentioned last month. A breakout from this range would influence the next major move in silver. A move past $25.7 would be a sign of strength and silver price could then head to the upside target of $26.8­27.5. A fall below $22.3 could trigger a slide to $2,1­21.2.

Mirroring the global trend, MCX gold and silver price too remained range­bound in August. MCX gold has to move above the upper end of the range at ₹60,200 or fall below the lower end of the range at ₹57,500 to trigger a strong directional move.

Above ₹60,200, the price could head to the next higher target of ₹62,500­63,000 while a fall below ₹57,500 could push the price lower to ₹55,500­56,000. MCX silver too was confined to a range in August. A breakout from the present range of ₹69,500­78,500 would determine the next big move in silver. Above ₹78,500, the price could head to ₹81,000­82,500 zone, while a fall below ₹69,400 could push the price to ₹64,500­65,000.

To summarise, precious metals’ prices are still stuck in a broad range and a breach of the upper or lower end of this range would influence the next big move in prices. Until then, range­bound and volatile price action is likely to prevail.

(The author is a Chennai­ based analyst/trader. The views and opinion featured in this column is based on the analysis of short­term 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.)

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