Fed policy meeting crucial for further direction for precious metals: MOFSL
For the precious metals, including gold and silver, 2021 was a poor year with negative returns of over 6% for both metals. However, on a YTD basis, gold and silver have posted gains of 7% and 5% respectively amid a number of factors including geopolitical tensions, inflation concerns.
While both of the above concerns will support gold price gains on the downside, according to Motilal Owal, “Next quarter’s Fed meeting will be very important in assessing further direction for the metal”.
Gold and Silver Price Outlook on the Comex and Domestic Markets for a 12 month period
On the Comex, gold is expected to trade in the $1,800-$2,050 range on a 12-month perspective. In the domestic markets the price. Speaking for domestic markets, the broker said: “On the domestic front, prices could trade in a wide range with critical support at Rs 50,000 followed by Rs 48,000 and 46,500 while rallies up towards Rs 55,000 would present opportunities for long positions leaving. Similarly, silver prices on the COMEX are expected to trade higher towards $26.45 and $27.15 with strong support at $24.20 and $23.70. With the buy strategy on dips, the Comex rally could extend past $30 over the next 12 months.”
Silver, which broadly trailed gold, was also trading at limited gains given the volatility of base metals, MOFSL noted. And since the beginning of the year, it has been trading in a wide range, giving hope for a bullish comeback.
Silver ETFs are seeing good inflows year-to-date versus outflows last year
Year-to-date versus silver ETF outflows. They started the year with decent inflows of around 16603 tons and now stand at 17975 tons. “Demand from the renewable sector could also pick up. The whole story around decarbonization in the COP26 and the whole ESG transition taking place in the economy will boost the demand for green technologies,” the report adds.
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Story first published: Wednesday, April 27, 2022 at 10:59 pm [IST]