Firm U.S. dollar saps gold, silver prices

Precious metals remained weak in October and closed lower for the seventh successive month. The sentiment was weighed down by a stronger dollar and elevated U.S. bond yields.

Comex gold closed 1.9% lower to close at $1,640.7 at the end of October. Comex silver, however, closed almost unchanged at $19.12.

In the domestic market, MCX gold closed marginally higher ₹50,322 per 10 gm while MCX silver gained 1.4% to ₹57,678 kg.

As anticipated last month, Comex gold moved higher to reach the upper end of the target of $1,695-1,715 range. After touching a high of $1,738.7, Comex gold turned down to close on a weak note. towards the end of October.

The short-term outlook for Comex gold is positive and the price could head to the $1,725-1,730 range. A move above $1,688 would strengthen the case for a rise to the target zone. A close below $1,620 would push the gold price to lower levels and invalidate the short-term positive outlook.

In the domestic market, MCX gold, too, reached the ₹51,500-52,000 target. In the short-term, the price of MCX gold is likely to head higher to the target zone of ₹52,200-53,000. A move above ₹51,300 would confirm this positive outlook while a fall below ₹49,800 would invalidate it.

To summarise, the short-term outlook for precious metals is positive in the short term. The medium-term outlook remains weak, and the downtrend is likely to resume on the completion of the anticipated short-term rise.

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