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After a strong performance in March, precious metals edged higher in April. Aided by geopolitical tension in the West Asia and rising demand from central banks, Comex gold breached the psychological $2,400 per ounce mark in April.
The de-escalation of tension in West Asa along with the dent in the prospects of an interest rate cut in the U.S., led to a cool off in precious metals price 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 ₹70,625 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 off 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 firm
Mirroring the global trend, MCX gold too ruled firm 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.)
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