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Silver price rises marginally backed by firm industrial metal, gold; trades below key averages

Technically, LBMA Silver above the $23.50 level could see $24.10-$25.22 levels. Support is at $23.40-$22.65 levels.

Mumbai / August 27, 2021 / 04:12 PM IST

Silver prices marginally rose on August 27 on dollar downtick, positive trend in industrial metal and gold ahead of Fed Chairman Jerome Powell’s speech later in the day. The precious metal had fallen 0.9 percent yesterday on the COMEX.

The white metal traded in the green after a gap-up start in the afternoon session, tracking the positive global cues but the firm rupee capped upside.

The semi-precious metal has been trading lower than 5, 20, 50, 100 and 200 days’ simple moving averages and exponential moving averages on the daily chart. The momentum indicator Relative Strength Index (RSI) is at 39.39, which suggests a sell in the price.

Silver along with gold traded in a narrow range as investors await Fed chief Jerome Powell’s speech at Jackson Hole, Wyoming for further cues.

St Louis Fed President Bullard told CNBC that he was skeptical that inflation would moderate and for that reason the Fed needed to start tapering its bond-purchasing program.

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Dallas Fed President Robert Kaplan said the strength of the US economy still puts the Fed on track to begin reducing its monthly bond purchases in October or soon after.

Sriram Iyer, senior Research Analyst at Reliance Securities said, “International silver prices are trading marginally firm this Friday afternoon in Asia. Technically, LBMA Silver above the $23.50 level could see $24.10-$25.22 levels. Support is at $23.40-$22.65 levels.”

On the domestic front, technically MCX Silver September below Rs 63,000 level could see Rs 62,600-62,000 levels. Resistance is at Rs 63,200-64,000 levels,” Iyer noted.

Kshitij Purohit, Product Manager, Currency & Commodities, CapitalVia Global Research Limited said, “The gold/silver ratio found firm support near 75 and is now attempting to reclaim the 75.50 level. If this approach is successful, the gold/silver ratio will rise to around 76, putting greater pressure on silver. If silver falls below this level, it will make its way to the $22.20 support level. If this level is successfully tested, the support at $22.60 will be tested. MCX Silver trading near Rs 63,000, support seen at Rs 62,800-62,600 regions while Rs 63,600 resistance for the day.”

Silver holdings in iShares ETF were unchanged for the second day at 16,978.71 tonnes, the lowest since November 2020. The fund NAV is trading at a discount of 0.42 percent.

The US dollar index traded marginally lower at 93.06, down 0.01 percent against the major cross in the afternoon session.

The spot gold-silver ratio stands at 75.94 to 1, indicating that gold has outperformed silver.

MCX Bulldesk dropped by 12 points, or 0.08 percent, to 14,154 at 3:23 pm. The index tracks the real-time performance of MCX Gold and MCX Silver futures.

In the futures market, September silver delivery touched an intraday high of Rs 63,338 and a low of Rs 62,754 per kg on the MCX. So far in the current series, the precious metal has touched a low of Rs 61,227 and a high of Rs 75,215.

Silver delivery for the September contract gained Rs 86, or 0.14 percent, to Rs 62,809 per kg at 3:26 pm with a business turnover of 4,405 lots. The same for December jumped Rs 21, or 0.03 percent, to Rs 63,304 per kg with a turnover of 8,336 lots.

The value of September and December’s contracts traded, so far, is Rs 754.16 crore and Rs 521.01 crore, respectively.

Similarly, the Silver Mini contract for August advanced Rs 88, or 0.14 percent to Rs 62,676 on a business turnover of 712 lots.

Silver may witness choppy trade as market players assess Fed’s monetary policy as well as the health of the Chinese economy however the general bias may remain weak amid demand concern, said Kotak Securities.

At 1000 (GMT), the precious metal rose 0.51 percent and was quoting at $23.66 an ounce in New York.

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Sandeep Sinha
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