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Precious metals continued to sail higher with both gold and silver recording handsome gains in March. Comex gold breezed past the psychological $3,100 mark to scale a fresh all-time high.
The sentiment toward the precious metals was bolstered by the concerns about the fallout from U.S. tariffs. The expectations of interest rate easing by the Federal Reserve also played a part in perking up the sentiment towards the precious metals.
Comex gold posted an impressive 10.1% gain in March to end the month at $3,157.40. Comex silver, too, regained its sheen and posted a 9.65% gain to settle at $34.76 an ounce, by the end of March.
Rupee effect
The performance of precious metals in the domestic market was slightly muted due to the strengthening of the Indian rupee. As a result, MCX gold gained 6.8% to settle at ₹90,820 per 10-gram at the end of March. MCX silver settled at ₹1,00,001 a kilogram, representing a 5.8% gain in March.
After a strong performance in March, precious metals turned over-extended from their mean and a cool off has happened in the past few days. After moving to the earlier mentioned target of $3,050-$3,100 Comex gold price has taken a sharp knock recently. The short-term outlook is negative, and the price could drop to $2,980-$3,000. The long-term trend however remains positive, and the price could resume its uptrend on the completion of the anticipated short-term cool off.
Comex silver managed to breakout above the key resistance at $33.6 and the price gathered momentum thereafter. Similar to gold, silver price too took a drubbing in the past few trading sessions. Fears of a recession and announcement of reciprocal tariff by China dented sentiment towards silver. The recent weakness is likely to persist and Comex silver price could test next support zone at $26-$26.50.
Mirroring the sentiment in the global markets, the MCX gold price too managed to hit record highs. As anticipated last month, the price achieved the then-mentioned target zone of ₹88,500-₹89,500.
Similar to the trend in the global markets, the domestic gold prices too have taken a hit in the last couple of days and this weakness is likely to persist in the near-term. A fall to ₹84,500-₹85,000 range appears likely in the short-term.
The short-term outlook for MCX silver too is not positive. The price could drop to the immediate support ₹80,200-₹80,700. Only a move above ₹1,05,000 would trigger further upside momentum.
To summarise, precious metal prices are cooling off from the recent extended run up.
This cool off is likely to persist in the near-term. The long-term trend however remains positive.
(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.)
Published – April 07, 2025 02:10 am IST