Silver prices surged above Rs 70,000 per kg on May 6 as participants increased their long positions as seen by the open interest. The precious metal had eased 0.1 percent on May 5 on the COMEX.
The white metal extended gains after a gap-up start in the afternoon session, tracking gains in gold and a weak dollar.
The semi-precious metal has been trading higher than 5, 20, 50, 100 and 200 days’ moving averages on the daily chart. The momentum indicator Relative Strength Index (RSI) is at 59.12, which indicates upbeat movement in prices.
Silver prices were supported by an improving outlook for industrial demand amid growth in the US and Chinese economy.
Silver holdings in iShares ETF dropped 7 tonnes to 17,643.7 tonnes. The fund NAV is trading at a premium of 0.67 percent.
The US dollar index depreciated 0.32 percent to 91 in the afternoon trade against the major cross.
The spot gold/silver ratio currently stands at 67.05 to 1 indicating that silver has outperformed gold.
MCX Bulldesk jumped 75 points or 0.51 percent, at 14,811 at 15:20. The index tracks the real-time performance of MCX Gold and MCX Silver futures.
“International silver prices are trading with gains on Thursday in the early afternoon in Asian trade, tracking firm gold and a weaker dollar. Technically, LBMA Silver Spot supports are at $26.60 and $26.30. Resistances are at $26.88 and $27.10," Sriram Iyer, Senior Research at Reliance Securities said.
Technically, MCX Silver July could see resistances at Rs 70,580 and a break above could push prices to Rs 71,400. Supports are seen at Rs 69,830 and Rs 69,450, Iyer added.
In the futures market, silver for July delivery touched an intraday high of Rs 70,496 and a low of Rs 69,651 per kg on the MCX. So far in the current series, the precious metal has touched a low of Rs 63,456 and a high of Rs 72,100.
Silver delivery for the July contract gained Rs 651, or 0.94 percent to Rs 70,270 per kg at 15:25 hours with a business turnover of 9,204 lots. The same for the September contract rose Rs 597, or 0.85 percent, to Rs 71,195 per kg with a turnover of 81 lots.
The value of July and September’s contracts traded so far is Rs 1,185.89 crore and Rs 6.82 crore, respectively.
Similarly, the Silver Mini contract for June edged higher Rs 596, or 0.86 percent at Rs 70,245 on a business turnover of 10,859 lots.
"Silver may witness choppy trade but improving demand outlook may continue to support, hence buying on dips is recommended. The trend in US dollar and bond yields may continue to affect gold and silver and the focus will be on economic data from major economies" said Kotak Securities.
At 10:00 (GMT), the precious metal was up 1.27 percent to quote at $26.85 an ounce in New York.
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