Silver prices edged lower to Rs 65,464 per kg on March 5 as participants increased their short positions as seen by the open interest. The precious metal had slipped 3.5 percent on March 4 on the COMEX.
The white metal traded in the red after a gap-down start in the afternoon session, tracking stronger dollar and weakness in gold.
The trend in the US dollar may continue to be a key price-determining factor for gold and silver and focus today will be on US and European economic data, the trend in bond yields and development relating to US stimulus and virus situation, said Kotak Securities.
US Federal Reserve Chair Jerome Powell repeated his pledge to keep credit loose and flowing until Americans are back to work, rebutting investors who have openly doubted he can stick to the promise once the pandemic passes and the economy surges on its own.
While Powell said the increase in bond yields was notable and caught his attention, he did not consider it a disorderly move, or one that pushed long-term rates so high the Fed might have to intervene in markets more forcefully to bring them down, such as by increasing its $120 billion in monthly bond purchases.
The semi-precious metal has been trading higher than 200-day moving averages but lower than 100, 50, 20 and 5 days’ moving averages on the daily chart. The Relative Strength Index (RSI) is at 39.12, which indicates weakness in prices.
Silver holdings in iShares ETF declined by 202.2 tonnes to 18,679.16 tonnes, the lowest since January 28.
The US dollar index traded higher at 91.98, up 0.37 percent in the afternoon trade against the major cross.
MCX Bulldesk dropped 83 points or 0.59 percent, at 14,058 at 15:26 hours. The index tracks the real-time performance of MCX Gold and MCX Silver futures.
“International and domestic silver prices extended losses this Friday morning and in early afternoon trade. Technically, LBMA Silver Spot will continue to trade on a negative note up to $24.90-$24.25 levels. Resistance is at $26.10-$27.05 levels," Sriram Iyer, Senior Research Analyst at Reliance Securities said.
“Technically, MCX Silver May has started to trade below Rs 66,000 which could further pull prices up to Rs 65,100 - Rs 64,300 levels while resistance is at Rs 66,400 - Rs 67,230 levels”, Iyer said.
In the futures market, silver for May delivery touched an intraday high of Rs 65,931 and a low of Rs 65,166 per kg on the MCX. So far in the current series, the precious metal has touched a low of Rs 59,826 and a high of Rs 75,501.
Silver delivery for the May contract fell Rs 457, or 0.69 percent to Rs 65,464 per kg at 15:29 hours with a business turnover of 12,544 lots. The same for the July contract declined by Rs 432, or 0.65 percent, to Rs 66,532 per kg with a turnover of 58 lots.
The value of May and July’s contracts traded so far is Rs 754.63 crore and Rs 11.95 crore, respectively.
Similarly, the Silver Mini contract for April slipped by Rs 415, or 0.63 percent at Rs 65,538 on a business turnover of 14,220 lots.
The spot gold/silver ratio currently stands at 67.26 to 1 indicating that gold has outperformed silver.
Kshitij Purohit, Product Manager, Currency & Commodities, CapitalVia Global Research Limited said, “The precious metal has support at Rs 64,700 - Rs 63,000 levels on the downside whereas resistance is at Rs 66,000-Rs 68,000 levels.
At 10:02 (GMT), the precious metal was down 0.80 percent to quote at $25.25 an ounce in New York.
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