Precious metals regained lustre with gold and silver recording handsome gains in July. The rising number of COVID-19 cases, along with the weakness in the U.S. dollar, was the driving force behind the surge in precious metal prices. Concerns around U.S.-China tensions too aided sentiment.
Comex gold gained 10.3% to settle at a high of $1,985.9 an ounce. This is the biggest monthly gain for Comex gold in the last 8 years. The price action in Comex silver was even more interesting, as it rose a whopping 30.6% in July to $24.2 an ounce. This was the biggest-ever monthly gain in silver.
Gold futures at MCX rose 9.5% in July to 53,544 per 10 gm. MCX silver futures closed 29% higher at 64,984 per kg in July. As observed last month, comex gold ruled firm and moved well past the target of $1,835-1,840. The recent uptrend in comex gold is likely to sustain in the short term. The price could head to the next target of $2,020-2,030 an ounce. A fall below $1,920 would invalidate the positive outlook for gold.
After several months of consolidation, Comex silver posted a massive breakout in July. The price moved well above the target zone of $19.9-20. The short-term outlook remains positive and a move to the next target zone of $25.75-26 is likely. The trend in Comex silver would turn negative below $22.
The price action in MCX gold futures was broadly in sync with earlier expectations. MCX gold moved well above the target of 50,700-51,000 and is currently at life-time highs. The short-term outlook is positive; the price appears headed to the immediate target of the 55,200-55,500 zone. The short-term trend would turn weak if the price falls below 51,000 per 10 gm. MCX silver posted handsome gains in July. A rise to the target of 68,500-69,000 appears likely. The short-term positive outlook would be under threat if the price closes below the support level of 60,000-60,500.
(The writer is a Chennai-based analyst / trader. This is not meant to be trading or investment advice)