Silver prices slumped to Rs 66,676 per kg on March 4 as participants increased their short positions as seen by the open interest. The precious metal had fallen 1.8 percent on March 3 on the COMEX.
The white metal extended decline after a gap-down start in the afternoon session tracking stronger dollar and weakness in gold and industrial metals.
Chicago Fed President Charles Evans said he sees the recent rapid rise in bond yields as mostly reflecting improvement in the economy.
Silver may witness volatile trade along with gold and industrial metals; however, general bias remains on the downside unless there is a sharp rise in gold price or sharp jump in investor buying, said Kotak Securities.
The key event today is comments from Fed Chairman Jerome Powell. He has so far maintained that the central bank may continue with lower interest rate and rising yields are not a concern. If Powell emphasises on the same, we may see some improvement in risk sentiment.
The semi-precious metal has been trading higher than 100 and 200 days’ moving averages but lower than 50, 20 and 5 days’ moving averages on the daily chart. The Relative Strength Index (RSI) is at 42.86 which indicates weakness in prices.
Silver holdings in iShares ETF increased by 46.2 tonnes to 18,880.35 tonnes, the first jump since February 23.
The US dollar index traded higher at 91.22, up 0.31 percent in the afternoon trade against the major cross.
MCX Bulldesk dropped 125 points or 0.87 percent, at 14,225 at 15:12 hours. 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 flat to marginally weaker this Thursday morning and early afternoon trade. Technically, LBMA Silver Spot will continue to trade on a negative note up to $25.70-$24.30 levels. Resistance is at $26.55-$27.05 levels.”
“Domestic silver prices are trading lower, tracking weak overseas prices. Technically, if MCX Silver May continues to trade below Rs 67,500 we could witness a downside momentum that will continue up to Rs 65,830 levels whereas resistance is at Rs 68,700-Rs 69,400 levels”, Iyer said.
In the futures market, silver for May delivery touched an intraday high of Rs 67,700 and a low of Rs 66,200 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 plummets Rs 1,324, or 1.95 percent to Rs 66,676 per kg at 15:14 hours with a business turnover of 12,644 lots. The same for the July contract declined Rs 1,340, or 1.95 percent, to Rs 67,675 per kg with a turnover of 50 lots.
The value of May and July’s contracts traded so far is Rs 1,404.92 crore and Rs 14.64 crore, respectively.
Similarly, the Silver Mini contract for April edged lower by Rs 1,232, or 1.81 percent at Rs 66,758 on a business turnover of 13,560 lots.
The spot gold/silver ratio currently stands at 66.21 to 1 indicating that gold has outperformed silver.
Kshitij Purohit, Product Manager, Currency & Commodities, CapitalVia Global Research Limited said, “MCX May Silver is trading below Rs 69,500 levels and if we break Rs 66,800 then we will head towards Rs 65,000. Gold/silver ratio did not manage to settle above 65.5 and declined towards 64.50. A move below this level will push gold/silver ratio towards the support at 64 which will be bullish for silver. The precious metal has support at Rs 66,000-Rs 65,000 levels on the downside whereas resistance is at Rs 69,500-Rs 70,000 levels.
At 09:50 (GMT), the precious metal was down 1.68 percent to quote at $25.94 an ounce in New York.
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