Precious metals regained their lost their sheen in October with both gold and silver closing the month on a strong note. Comex gold recorded its biggest monthly rise since November 2022 and closed near the highest level in the last three months. The geopolitical tensions triggered by the Israel-Hamas conflict played a key role in bolstering sentiment in favour of the precious metals.
As a result, Comex gold closed 6.9 per cent higher at $1,994.3 at the end of October. The gain in Comex silver was relatively muted with the white metal recording a 2.2 per cent gain to settle at $22.95 an ounce.
Mirroring the trend in the global markets, MCX gold closed on a positive note at ₹61,280 representing a gain of 6.4 per cent in October. MCX Silver posted a 4.1 per cent gain in October to settle at ₹72,755 per kilogram.
As anticipated last month, Comex gold dropped to the lower end of the target zone at $1,850 and recovered sharply thereafter. The recovery has pushed the price above the positive trigger level of $1,960 mentioned last month. The short-term trend, as a result, has turned positive and Comex gold could head to the immediate target of $2,035-2,040.
The short-term positive outlook for Comex gold would be confirmed once the price crosses the immediate resistance level of $2,021. On the contrary, a fall below $1,940 would be a sign of weakness and could delay the rally to the above-mentioned target zone.
Similar to gold, Comex silver, too, dropped below the lower trigger level and reached the target of $21 mentioned last month. The price is now confined within the trading zone of $20.6-$24.2. A breakout from this range will set the tone for the next major move. Until then, expect volatile price action within the current range of $20.6-$24.2.
Mirroring the global trend, MCX gold recovered strongly after a weak start in October. The recovery pushed the gold price above the positive trigger level of ₹59,960 which is a sign of strength. The short-term outlook is positive and MCX gold could head to ₹61,750-62,250 zone. This view would be confirmed if the price moves above ₹61,600. A fall below ₹59,100 would invalidate the positive outlook.
Volatile movement likely
As anticipated last month, MCX silver almost hit the target of ₹64,500-65,000. The price is currently confined within the range of ₹65,000-73,000. A breakout from this range would trigger the next big move in silver. Until then volatile price movement within this trading range is likely.
To summarise, precious metals have recovered smartly suggesting scope for further upside, especially in gold. Silver prices have stayed largely range-bound and do not exhibit the same level of strength as gold.
(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.)