The price of precious metals remained range bound in May. The sentiment was influenced by the news flow relating to key economic data and stimulus packages announced across the globe. Besides, the news flow relating to the COVID-19, too, played a role in influencing their prices.
Comex gold gained 3.4% to settle at $1,751.7 an ounce by the end of May. The price action in Comex silver was more dramatic with the white metal gaining 24.2% to settle at $18.5 an ounce.
In the domestic market, MCX gold futures gained 4.5% to settle at ₹47,069 per 10 gm. MCX silver futures gained 22% to close at ₹50,096 a kg.
As observed last month, Comex gold was confined to the trading range of $1,650-1,800. The short-term outlook is positive. Comex gold has bounced back from the lower end of the range which is a sign of strength. A move to the immediate resistance at $1,775-1,785 is likely. The uptrend would gather momentum on a close above $1,800. The positive outlook would be under threat if the price closes below the support level at $1,650.
Comex silver, too, moved in line with last month’s expectations. The price moved up and reached the target of $17.8-18 mentioned in the previous post. The short-term outlook is positive and Comex silver can move to the short-term target of $19.3-19.8 range. A breakout above $18.2 would be a sign of strength and strengthen the case for a rise to the target zone. A fall below $16.5 would be a sign of weakness and warrant a reassessment of the positive view.
MCX gold futures ruled firm and achieved the target zone of ₹47,800-49,000 mentioned last month. The short-term outlook is positive and gold futures is likely to progress to the immediate target zone at ₹49,100-49,800 zone. A breakout past ₹47,700 would confirm the bullish case scenario. The short-term trend would turn weak if the price falls below ₹44,800 per 10 gm.
MCX silver, too, achieved the target of ₹47,500-48,000. The strong breakout in the price of May 29 is a positive sign. It is likely to head higher to the immediate target zone at ₹52,000-53,000 per kg. A breakout above ₹51,000 would lend momentum to the upside.
(The author is a Chennai based analyst/trader. This is not meant to be trading or investment advice)