Silver prices climbed above Rs 64,000 per kg on October 19, tracking a positive trend in gold and industrial metals, ETF inflows and a softening dollar index.
The precious metal had fallen 0.4 percent on October 18 on the COMEX. Silver extended gain to trade near day’s high in the afternoon session, tracking the strong global trend.
Silver has been trading higher than the 5, 20, and 50 days' simple and exponential moving averages but lower than the 100 and 200 days’ SMA and EMA on the daily chart. The momentum indicator Relative Strength Index (RSI) was at 63.55, indicating an upbeat movement in the price.
“On the weekly chart, MCX Silver has reversed from its horizontal support as well as has given a falling channel break out. The metal has breached immediate resistance at Rs 63,925 and the price sustained break above the same will confirm the further positive move," Jigar Dharamshi, Technical Analyst at Motilal Oswal, said.
Source: Motilal Oswal
The 14-period RSI has reversed from its oversold zone indicating further strength and MACD is about to give a crossover which will confirm further strength in price, he said.
Source: Motilal Oswal
Dharamshi stated on the daily chart the counter has been sustaining well above the downward sloping channel and now major support is placed at Rs 61,600. Buying for the short-term will be recommended for the metal and price sustained break above Rs 63,925 will lead the move towards Rs 65,780 and majorly it also has the potential to test Rs 70,000 mark.
He recommends buying in the range Rs 63,550-63,000 for the medium term, but our bias for the metal will negate if the price break and sustain below support.
"Silver may witness choppy trade amid mixed factors however with stable gold price and generally firm industrial metals, we may see buying interest at lower levels," said Kotak Securities.
According to the brokerage firm, the trend in the US dollar, bond yields and equities may continue to affect gold and silver and the focus will be on economic data, central bank comments and development relating to the energy crisis and China’s economic health and property market.
Silver holdings in iShares ETF increased by 7.2 tonnes to 17,224.59 tonnes. The fund NAV is trading at a discount of 0.16 percent.
The US dollar index dropped by 0.47 percent at 93.51 against the major currencies in the afternoon session.
The spot gold-silver ratio was at 74.99 to 1, indicating that silver had outperformed gold.
MCX Bulldek rose 99 points, or 0.70 percent, to 14,249 at 3.34pm. The index tracks the real-time performance of MCX Gold and MCX Silver futures.
On MCX, the December silver delivery touched an intraday high of Rs 64,391 and a low of Rs 63,552 a kg. In the current series, the metal has touched a low of Rs 58,150 and a high of Rs 74,127.
Silver delivery for the December contract edged higher Rs 965, or 1.53 percent, to Rs 64,231 per kg at 3.35pm with a business turnover of 9,891 lots. The same for March soared Rs 968, or 1.52 percent, to Rs 64,766 with a turnover of 2,529 lots.
The value of December and March contracts traded so far is Rs 1,356.88 crore and Rs 86.21 crore, respectively.
The Silver Mini contract for November advanced by Rs 847, or 1.33 percent, to Rs 64,295 on a business turnover of 25,510 lots.
At 10:08am GMT, silver was trading 2.14 percent higher and was quoting at $23.76 an ounce in New York.
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