Silver prices jumped to Rs 68,162 per kg on March 1 as participants reduced positions as seen by the open interest. Last week, the precious metal had declined 2.34 percent on the COMEX.
The metal traded in the positive territory after a gap-up start in the afternoon session, tracking gains in gold and industrial metals.
Speculators decreased their bullish positions in COMEX silver by 1,569 contracts to 39,421 in the week to February 23, according to CFTC data.
The semi-precious metal has been trading higher than 5, 20, 50, 100 and 200 day-moving averages on the daily chart for the May contract. The Relative Strength Index is at 52.91, indicating positive momentum in prices.
Silver holdings in iShares ETF fell by 57.7 tonnes to 19,156.60 tonnes on ETF outflow.
The US dollar index traded firm at 91.08, up 0.22 percent in the afternoon trade against the major currencies.
MCX iCOMDEX Bullion Index, which tracks the real-time performance of MCX gold and silver futures, soared 100.75 points, or 0.69 percent, at 14,670.61 at 1533 hours.
“International silver rose this Monday morning and early afternoon trade in Asia supported by hopes of rebound of industrial demand. Technically, LBMA silver spot could trade in the range of $26.00-$27.46 levels,” Sriram Iyer, Senior Research Analyst at Reliance Securities, said.
“Domestic silver prices also bounced back this Monday morning and early afternoon trade, tracking overseas prices. Technically, MCX May silver is trading above Rs 69,000 and now can bounce back up to Rs 70,300-71,000 levels while support is at Rs 69,200-68,700 levels”, Iyer said.
In the futures market, silver for March delivery touched an intraday high of Rs 68,575 and a low of Rs 67,763 per kg on the MCX. So far in the current series, the precious metal has touched a low of Rs 54,386 and a high of Rs 79,980.
Silver delivery for March surged Rs 901, or 1.34 percent, to Rs 68,162 per kg at 1539 hours with a business turnover of 3,963 lots. The same for the May contract gained Rs 831, or 1.21 percent, to Rs 69,615 per kg with a turnover of 12,374 lots.
The value of March and May’s contracts traded so far is Rs 275.05 crore and Rs 1,012.83 crore, respectively.
The spot gold/silver ratio stands at 65.09 to 1, indicating that gold has outperformed silver.
Kshitij Purohit, Product Manager, Currency & Commodities, CapitalVia Global Research Limited said, “For the upcoming week, traders should go for buy-on-dips strategy in silver, where one should look for entry around Rs 65,500 with keeping a stop loss around Rs 63,500 and a target of Rs 69,500.”
Silver has major support at Rs 63,636-61,366 while major resistance is at Rs 70,954-74,426, he said.
At 1013 GMT, the precious metal was up 1.78 percent quoting at $26.91 an ounce in New York.
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