Silver prices moderately rose and traded above Rs 58,500 per kg on September 30 after a massive selloff yesterday in the global market as dollar rebounded to 11 month high. The precious metal had slumped 4.37 percent yesterday on the COMEX.
Silver traded in the positive territory in the afternoon trade after a gap-up start, tracking the firm global cues.
The white metal has been trading lower than the 5, 20, 50, 100 and 200-day simple moving averages and exponential moving averages on the daily chart. The momentum indicator Relative Strength Index (RSI) was at 31.89, indicating weakness in the price.
The precious metal fell yesterday as the dollar rose on expectations that US Federal Reserve could soon begin winding down its economic support measures.
Also weighing on the price is the weak September PMI manufacturing data from China coming at 49.6 compared with 50.1 in August.
Sriram Iyer, Senior Research Analyst at Reliance Securities said, “The dollar rallied to a one-year high against rival currencies, boosted by increased expectations for a reduction in the US Federal Reserve's asset purchases starting in November and an interest rate hike, possibly in late 2022. The greenback ignored an impasse in Washington over the US debt ceiling that threatened to plunge the government into a shutdown.”
Kshitij Purohit, Product Manager, Currency & Commodities, CapitalVia Global Research Limited said, “On Wednesday, silver prices fell, breaking through horizontal trend support and threatening to test lower levels. The lows of June 2020, around $16.25, are a target for support. Silver prices face resistance near the recent breakdown level at $22.10.” “MCX Silver is trading near Rs 58,300 with support seen at Rs 57,200-57,400 levels, while resistance is seen at Rs 59,600.”
Silver holdings in iShares ETF fell by 15.84 tonnes to 16,827.39 tonnes. The fund NAV is trading at a discount of 3.54 percent.
The US dollar index was slightly down 0.02 percent at 94.33 against the major currencies in the afternoon session.
The spot gold-silver ratio was at 79.91 to 1, indicating that gold had outperformed silver. The rise in the Mint ratio is a bearish sign for silver.
MCX Bulldesk rose 18 points, or 0.13 percent, to 13,559 at 3.35 pm. The index tracks the real-time performance of MCX Gold and MCX Silver futures.
On MCX, December silver delivery touched an intraday high of Rs 58,669 and a low of Rs 58,285 a kg. In the current series, the metal has touched a low of Rs 58,181 and a high of Rs 74,127.
Silver delivery for the December contract gained Rs 114, or 0.20 percent, to Rs 58,500 per kg at 3.37 pm with a business turnover of 15,473 lots. The same for March jumped Rs 270, or 0.46 percent, to Rs 59,140 with a turnover of 939 lots.
The value of December and March’s contracts traded, so far, is Rs 586.71 crore and Rs 7.25 crore, respectively.
The Silver Mini contract for November edged higher Rs 133, or 0.23 percent, to Rs 58,795 on a business turnover of 36,481 lots.
Iyer added, “Technically if LBMA Silver continues below $22.00 level the markets could continue its downside momentum up to $21.20-$20.50 levels. Resistance is at $21.80-$22.10 levels. Technically, if MCX Silver December trades below Rs 58,500 level the markets could continue its bearish momentum up to Rs 57,900-57,000 levels. Resistance is at Rs 59,000-60,200 levels.”
At 1010 (GMT), silver was 0.71 percent higher and was quoting at $21.63 an ounce in New York.
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