Dollar rally hits gold, silver

The weakness in precious metals witnessed in July spilled over to the month of August as well. After

The weakness in precious metals witnessed in July spilled over to the month of August as well. After a recovery in the early part of the month, precious metals lost sheen in the latter half of August.

The rally in the U.S. dollar and expectations of an aggressive interest rate increase by the U.S. Federal Reserve affected sentiment towards precious metals.

As a result, Comex gold fell 3.1% in August to close at $1,726.2 an ounce. Comex silver recorded a much steeper cut of 11.5% to settle at $17.88 an ounce.

In the domestic market, MCX gold futures fell 2.4% to ₹50,414 per 10 gm. MCX silver futures lost 10.6% to settle at ₹53,151 per kg.

In line with expectations, the Comex gold price hit the target of $1,825-1,835 mentioned last month. After recording a high of $1,825 on August 10, the price turned weak in the latter half of August.

The short-term outlook for Comex gold remains weak and the price could drop to the $1,660-1,670 zone.

A break below the crucial support level of $1,645 will be a major sign of weakness and could push the price to further lows. Below $1,645, Comex gold could slide to $1,600-1,610. The price has to close above $1,775 to invalidate the weak outlook.