Silver prices soared to Rs 67,992 per kg on February 5 as participants increased their long positions as seen by the open interest. The precious metal had declined 2.4 percent yesterday on the COMEX.
The white metal extended gains after opening gap up to trade at day’s high in the afternoon session tracking gains in gold and a weak dollar.
Silver prices were also supported by the positive economic data and optimism that the global economy is recovering from the pandemic.
Silver holdings in iShares ETF fell by 313.5 tonnes to 20,505.85 tonnes, dropping for the second successive day.
The US dollar index trades lower at 91.37 levels, down 0.19 percent in the afternoon trade after hitting a two-month high.
MCX iCOMDEX Bullion Index inched higher 155.75 points, or up 1.06 percent, at 14,901.94 at 14:56. The index tracks the real-time performance of MCX Gold and MCX Silver futures.
Sriram Iyer, Senior Research Analyst at Reliance Securities, said, “International silver prices are trading with gains this Friday morning and early afternoon trade in Asia amid hopes that passage of the US stimulus could spur industrial demand for the white metal. Technically, LBMA Silver Spot could trade in a sideways momentum in the range of $26.00-$27.80 levels.”
He added that domestic silver prices are trading higher this morning and early afternoon trade, tracking the overseas markets.
In the futures market, silver for March delivery touched an intraday high of Rs 68,333 and a low of Rs 67,205 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 contract rose by Rs 1,104, or 1.65 percent to Rs 67,922 per kg at 14:58 hours with a business turnover of 12,860 lots. The same for the May contract jumped Rs 994, or 1.46 percent, to Rs 68,995 per kg with a turnover of 1,446 lots.
The value of March and May’s contracts traded so far is Rs 1,226.81 crore and Rs 39.01 crore, respectively.
The spot gold/silver ratio currently stands at 67.87 to 1 indicating that silver has outperformed gold.
Technically, MCX Silver March holds a support of 21-Daily Moving Average at Rs 67,300 levels and above which could see sideways to bullish momentum. The range for the day will be Rs 66,000-68,300 levels, said Iyer.
He recommends selling March Silver near Rs 67,500-67,550 with a stop loss of Rs 68,500 for a target of Rs 65,500.
Kotak Securities said while we may see some stability in silver now, the general bias still remains weak.
At 09:33 (GMT), the precious metal was up 1.81 percent quoting at $26.71 an ounce in New York.
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