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Silver price gives breakout above 50-day SMA and EMA to trade above Rs 63,000/kg

"Silver may witness choppy trade along with gold and industrial metals; however, we expect gold to benefit from rising global risks and this may result in dip-buying interest in silver as well," said Kotak Securities.

Mumbai / October 14, 2021 / 04:05 PM IST

Silver prices rose above Rs 63,000 per kg on October 14 after a sharp rally yesterday in the global market, tracking gains in gold and industrial metals on a weaker dollar. The precious metal had soared 2.9 percent on October 13 on the COMEX.

Silver pared earlier losses and turned green to trade at day’s high in the afternoon session, tracking the firm global trend.

The white metal 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 59.65, indicating a bullish movement in the price.

Sriram Iyer, Senior Research Analyst at Reliance Securities said, “Gold and silver prices found support as a pullback in the dollar and US Treasury yields lifted demand for the safe-haven metal. The US Dollar eased back from a one-year high on Wednesday as longer-dated Treasury yields fell even after US inflation data that showed prices rose solidly in September, advancing expectations for Federal Reserve tightening.”

The FOMC minutes from the Fed's September policy meeting signalled that the central bankers could start tapering their support for the economy in mid-November.

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The minutes also showed that the members remained divided over how much of a threat high inflation poses and how soon they may need to raise interest rates in response.

However, weighing on the price is a slowdown in the Chinese economy, manufacturing activity globally, and lack of investor interest.

"Silver may witness choppy trade along with gold and industrial metals; however, we expect gold to benefit from rising global risks and this may result in dip-buying interest in silver as well," said Kotak Securities.

Silver holdings in iShares ETF were unchanged for the second day at 16,987.04 tonnes. The fund NAV is trading at a premium of 0.63 percent.

The US dollar index marginally dropped by 0.26 percent at 93.83 against the major currencies in the afternoon session.

The spot gold-silver ratio was at 77.29 to 1, indicating that silver had outperformed gold.

MCX Bulldek jumped 53 points, or 0.36 percent, to 14,310 at 3.42 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 63,390 and a low of Rs 62,487 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 394, or 0.63 percent, to Rs 63,281 per kg at 3.43 pm with a business turnover of 10,164 lots. The same for March surged Rs 401, or 0.63 percent, to Rs 63,761 with a turnover of 1,768 lots.

The value of December and March contracts traded so far is Rs 1,006.88 crore and Rs 44.70 crore, respectively.

The Silver Mini contract for November advanced by Rs 351, or 0.56 percent, to Rs 63,415 on a business turnover of 25,413 lots.

“International silver prices have started flat to marginally weaker and turn positive this Thursday afternoon in Asian trade. Technically, LBMA Silver range for the day is $22.75-$23.51. On the MCX Silver December range for the day is Rs 61,400-64,000”, Iyer added.

At 10:17 (GMT), silver was 0.67 percent higher and was quoting at $23.31 an ounce in New York.

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Disclaimer: The views and investment tips expressed by experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Sandeep Sinha

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