Gold and Precious Metals

Gold gains glitter, silver ebbs

The last month of the year 2023 was characterised by mixed sentiments towards precious metals. While Comex gold managed to regain its sheen after a weak start to the month, Comex silver ruled relatively weak. The weakness in the U.S. dollar and the expectations of an interest rate cut by the U.S. Federal Reserve triggered positive sentiment towards gold.

Comex gold gains

Comex gold gained 0.7% in December to end at $2,071.8. The yellow metal posted a gain of 13.45% for 2023. Comex silver ended with a decline of 6.1% to settle at $24.09.

Mirroring the trend in the global markets, MCX gold gained 0.9% in December and closed at ₹63,189 per 10-gram. MCX silver closed 4% lower at ₹74,400 per kilogram.

Comex gold ruled weak as anticipated last month. But the price did not reach the then mentioned downside target zone of $1,960-$1,980. The subsequent move above the positive trigger level of $2,060 indicates that gold has resumed its prior uptrend.

The price could head to the immediate target zone of $2,095-2,110. Only a fall below $2,020 would invalidate this positive outlook.

The price of Comex silver moved in sync with last month’s expectations. As anticipated, the price reached the target zone of $24.75-$25.25 mentioned last month. Comex silver price has been confined in a range of $21.9-$26.4. A breakout from this range would set the tone for the next big move in silver. Until then, expect volatile price action within this range.

Mirroring the global trend, MCX gold ruled firm in December. The price ruled weak in the beginning of the month and almost reached the downside target zone of 59,800-₹60,500. More recently, MCX gold has been trading in the ₹59,900-₹64,000 zone. A move above ₹64,000 would impart momentum to the upside and the price could then head to ₹65,500-66,000.

A fall below ₹59,900 would be a sign of weakness and could push the gold price to lower levels.

MCX silver rules weak

As observed last month, the MCX silver price ruled weak in the first half of December. The price almost reached the then mentioned downside target zone of ₹69,500-₹70,500. MCX silver has been trading recently in the ₹70,700-₹78,500 zone. A breakout from this zone would fuel the next significant directional move.

Until the price breaks out of the above range, expect volatile range-bound price action to persist. Above ₹78,500, the price could head to the ₹81,500-₹82,500 zone. A fall below ₹70,700 would be a sign of weakness and MCX silver could then slide to ₹66,000-₹67,500 zone.

To summarise, the short-term outlook for precious metals is mixed. While gold appears to be relatively stronger and set to head higher, silver is still confined in a trading range.

(The author is a Chennai-based analyst / trader. This is not meant to be a trading or investment advice.)

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