Silver prices fell to Rs 66,049 per kg on January 28 as participants increased their short positions as seen by the open interest. The precious metal had risen 0.6 percent on January 27 on the COMEX.
The white metal traded in the red after a gap down open tracking weakness in gold, firm US dollar after the US Federal Reserve kept rates unchanged.
Silver prices were pressured downward by downbeat growth outlook and lack of hint of fresh measures dampened risk sentiment boosting the US dollar.
The US dollar index traded higher at 90.72 levels, up 0.08 percent, in the afternoon trade.
Silver holdings in iShares ETF decreased by 43.3 at 17,787.58 tonnes, the lowest since January 18.
MCX iCOMDEX Bullion Index eased 51.86 points, or down 0.34 percent, at 15,221.16 at 15:52. The index tracks the real-time performance of MCX Gold and MCX Silver futures.
Sriram Iyer, Senior Research Analyst at Reliance Securities, said: “International and domestic silver prices are trading down this Thursday morning and early afternoon trade in Asia, tracking weak gold and strong US Dollar. Meanwhile, silver underperformed gold as the gold-silver ratio rose this Thursday morning and early afternoon trade.”
Technically, LBMA Silver Spot is trading near $24.80-$24.90 levels and below which could see some correction up to $24.30-$23.90 levels. Resistance is at $25.45-$25.70 levels, he added.
In the futures market, silver for March delivery touched an intraday high of Rs 66,095 and a low of Rs 65,501 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 declined Rs 487, or 0.73 percent, to Rs 66,049 per kg at 14:55 hours with a business turnover of 12,135 lots. The same for the May contract slumped Rs 483, or 0.72 percent, to Rs 66,947 per kg with a turnover of 1,359 lots.
The value of March and May’s contracts traded so far is Rs 1,190.79 crore and Rs 6.41 crore, respectively.
The spot gold/silver ratio currently stands at 73.12 to 1 indicating that gold has outperformed silver.
After the Fed’s downbeat assessment, the focus will now move to US GDP which will highlight the impact of the surge in coronavirus cases on economic growth in Q4, said Kotak Securities.
At 09:28 (GMT), the precious metal was down 0.57 percent quoting at $25.24 an ounce in New York.
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