Fed Policy Meet Crucial For Further Direction For Precious Metals: MOFSL

For the precious metals including gold and silver, year 2021 was a weak one with negative returns of over 6% on both the metals. Nevertheless, given a slew of factors including geo-political tensions, inflationary concerns, gold and silver on a YTD basis have seen gains to the tune of 7% and 5%, respectively.

The above 2 concerns will though support gold price gains on the lower side but as per Motilal Owal "for the next quarter Fed policy meeting will be very important to gauge further direction for the metal".

Gold and silver price outlook on Comex and domestic markets for a period of 12 months

On the Comex, gold from a 12 months perspective is expected to trade in the range of $1800-$2050. In the domestic markets the price. For the domestic markets, the brokerage said, "on domestic front, prices could trade in a broad range with critical support at Rs.50, 000 followed by 48,000 and 46,500, while rallies on upside towards Rs.55, 000 would be opportunities to exit longs positions. Similarly on the COMEX, silver prices are expected to trade higher towards $26.45 and $27.15 with strong support placed at $24.20 and $23.70. With buying on dips strategy, the rally might extend over $30 on Comex over next 12 months".

Silver largely following gold was also seen to trade with restricted gains amid volatility in base metals, noted MOFSL. And since the start of the year has been moving in a broad range, leading to hopes for bulls to make a comeback.

Silver ETFs see good inflow in the current year as against outflows in the previous year

In the current year as against the outflows seen in Silver ETFs. They starting off the year with decent inflows of approximately 16603 tonnes now stand at 17975 tonnes. "Demand consumption from renewable sector could start to pick up as well. The whole story around de-carbonization in COP26 and whole ESG transition that's taking place in the economy will push demand for green technologies", adds the report.