Silver prices tumbled to Rs 64,633 per kg on March 25 as participants increased their short positions as seen by the open interest. The precious metal ended flat March 24 on the COMEX.
The white metal extended decline after a gap-down start in the afternoon session to trade at day’s low, tracking stronger dollar and weakness in gold and industrial metals.
The semi-precious metal has been trading lower than 5, 20, 50 and 100 days’ moving averages but higher than 200-day moving averages on the daily chart. The Relative Strength Index (RSI) is at 38.53 which indicates bearish momentum in prices.
Fed officials in their speech on March 24 mentioned that they are not looking for any kind of rate hike unless and until they see an actual improvement in the economy.
The selling pressure in Chinese equity markets and mixed economic data from major economies weighed on the silver.
Silver holdings in iShares ETF declined by 101.1 tonnes to 18,120.79 tonnes, the lowest since January 28. The fund NAV is trading at a discount of 0.64 percent.
The US dollar index traded higher at 92.66, up 0.14 percent in the afternoon trade against the major cross. The dollar index is trading at the highest level in four months and gained 3.08 percent year-to-date.
The spot gold/silver ratio currently stands at 69.47 to 1 indicating that gold has outperformed silver. While the gold has been steady, silver is pressurised by concerns about the Chinese economy.
MCX Bulldesk fell 36 points or 0.25 percent, at 14,127 at 15:11. The index tracks the real-time performance of MCX Gold and MCX Silver futures.
In the futures market, silver for May delivery touched an intraday high of Rs 65,198 and a low of Rs 64,580 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 slid by Rs 612, or 0.94 percent to Rs 64,633 per kg at 15:22 hours with a business turnover of 11,909 lots. The same for the July contract slipped by Rs 707, or 1.07 percent, to Rs 65,661 per kg with a turnover of 265 lots.
The value of May and July’s contracts traded so far is Rs 754.36 crore and Rs 25.30 crore, respectively.
Similarly, the Silver Mini contract for April edged lower by Rs 631, or 0.96 percent at Rs 64,832 on a business turnover of 18,732 lots.
Silver along with gold may continue to sway with the US dollar; however, we expect gold to benefit from safe-haven buying and this may support silver as well, said Kotak Securities.
At 09:55 (GMT), the precious metal was down 1.13 percent to quote at $24.94 an ounce in New York.
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