Conflict adds lustre

Precious metals are in a cool-off phase after a sharp rise in the early part of March

Helped by the Russia-Ukraine conflict, Comex gold posted its biggest quarterly gain since September 2020. The concerns on the rising U.S. inflation rate also played a role in bolstering sentiment.

Comex gold gained 2.8% in March to close at $1,954 an ounce. Comex silver posted a slightly better performance, posting gains of 3.2% to settle at $25.13 an ounce. Mirroring the global trend, MCX gold futures gained 2.4% to close at ₹52,166 per 10 gm. MCX silver futures closed 2.4% higher at ₹67,487 per kg.

Comex gold managed to move well beyond the second target of $2,025-2,030 mentioned last month. After moving to a high of $2,078.8 in early March, the gold price has cooled off and is confined to a trading range in the past few days. A breakout from this range would set the tone for the next move.

A move past $1,970 could help Comex gold rise to $2,015-2,025. On the other hand, a fall below $1,855 would be a sign of weakness and could push the price down to major support at $1,835-1,840.

Comex silver, too, ruled firm and reached the target of $27.75-28.8 mentioned last month. The short-term outlook depends on the price action in the near term. A move past the resistance level at $26.5 will be a sign of strength and the price could then head to the $27.50-28.50 zone.

On the contrary, a drop below the support level at $23.8 would be a sign of weakness and the Comex silver price could then drop to the $21.5-22.5 zone.

In sync with the international price, the MCX gold price, too, moved well past the target price of ₹53,500-54,500 mentioned last month. The short-term outlook is positive and a move to ₹54,100-54,600 appears likely. This view would be validated if the price moves past ₹52,400. A fall below ₹49,800 would invalidate the positive outlook.