Precious metals remained subdued in July and closed on a weak note for the fifth month in succession. There was, however, a handsome recovery in price towards the end of July, helped primarily by the softening of the U.S. dollar. For the best part of July, precious metal prices were under pressure owing to the firm trend in the dollar.

Comex gold fell 1.4% in the month to $1,781.8 an ounce. Comex silver recorded a relatively modest dip of 0.8% to settle at $20.20 an ounce.

In the domestic market, MCX gold futures fared relatively better, posting a gain of 1.65% to close at ₹51,626 per 10 gm. MCX silver futures registered a marginal drop of 0.9% to settle at ₹58,370 per kg at the end of July.

Contrary to expectations, the Comex gold price remained weak and the anticipated recovery in price did not play out. However, the recent recovery in price, from the key support zone of $1,660-1670, is a positive sign. The short-term outlook would be positive as long as the price trades above the lower end of the support zone at $1,660.

Until this support zone is broken, there would be a strong case for a rise in Comex gold to the short-term target range of $1,825-1,835. A move past $1,790 would strengthen the case for a rise to $1,825-1,835.

Sharp recovery

Comex silver price, too, staged a sharp recovery towards the close of July but the anticipated recovery did not materialise. The short-term outlook is positive and a move past $20.5 will confirm this view. Above $20.5, the price could head to the near-term target of $21.5-22. The positive outlook would come under threat if the price drops below $18.5.

In the domestic market, MCX gold price was broadly range-bound with a sharp recovery witnessed towards the end of July. The short-term outlook is positive and a move above ₹51,900 would confirm the positive outlook.

Above ₹51,900, the price could head to the ₹53,300-53,500 range. The outlook would be suspect if the price falls below ₹49,800.

MCX silver, too, ruled weak. The short-term outlook, however, is positive and a move to ₹62,500-63,000 appears likely. A close below ₹54,300 would invalidate the positive outlook for MCX silver.

To summarise, the short-term outlook for precious metals appears positive. This medium-term trend, however, remains weak. Unless the price falls below the support levels mentioned above, expect a rise to the target zone mentioned above.

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