Silver prices edged higher to Rs 65,119 per kg on March 26 as participants increased their long positions as seen by the open interest. The precious metal had slipped 0.7 percent yesterday on the COMEX.
The white metal extended gains after a flat to gap-down start in the afternoon session on lower dollar and firm gold and industrial metals.
The semi-precious metal has been trading lower than 5, 20, 50 and 100 days’ moving averages but higher than 200-day moving averages on the daily chart. The Relative Strength Index (RSI) is at 40.06 which indicates weak momentum in prices.
Silver has witnessed mixed trade along with gold in the past few sessions but has generally underperformed and this is evident from the gold/silver ratio which has risen towards 70 levels.
A stronger US dollar and firm US treasury kept upside capped, while risk appetite waned in wider financial markets as fresh lockdowns in Europe to curb rising coronavirus cases boosted safe-haven appeal.
US Labor Department reported that the number of Americans filing jobless claims dropped to 684,000 last week from 781,000 the week before. This was the first time claims had been below 700,000 during the pandemic era.
Silver holdings in iShares ETF decreased by 63.5 tonnes to 18,057.27 tonnes, the lowest since January 28. The fund NAV is trading at a premium of 1.65 percent.
The US dollar index trade mildly lower at 92.72, down 0.11 percent in the afternoon trade against the major cross. The dollar index jumped to 92.86 during the intraday.
The spot gold/silver ratio currently stands at 68.65 to 1 indicating that silver has outperformed gold.
MCX Bulldesk slightly lower 4 points or 0.03 percent, at 14,108 at 15:14. The index tracks the real-time performance of MCX Gold and MCX Silver futures.
Sriram Iyer, Senior Research Analyst at Reliance Securities said: “International silver prices are trading with small gains this morning and early afternoon trade in Asia. However, for the week, silver was down by about 4 percent. Technically, LBMA Silver Spot has bounced back from 200-Daily Moving Average of $24.40 levels suggesting that a move up to $25.65-25.81 levels could be possible. Support is at $24.80-$24.45 levels.”
MCX Silver May is holding supports near Rs 64,400-63,700 levels and resistance at Rs 65,900-66,300 levels.
Iyer advises his clients to buy for the rest of the session near Rs 65,000 with a stop of Rs 64,000 and a target of Rs 67,000.
In the futures market, silver for May delivery touched an intraday high of Rs 65,244 and a low of Rs 64,774 per kg on the MCX. So far in the current series, the precious metal has touched a low of Rs 59,826 and a high of Rs 75,501.
Silver delivery for the May contract rose Rs 250, or 0.39 percent to Rs 65,119 per kg at 15:20 hours with a business turnover of 11,008 lots. The same for the July contract gained Rs 252, or 0.38 percent, to Rs 66,138 per kg with a turnover of 279 lots.
The value of May and July’s contracts traded so far is Rs 581.72 crore and Rs 24.36 crore, respectively.
Similarly, the Silver Mini contract for April climbed Rs 235, or 0.36 percent at Rs 65,285 on a business turnover of 16,403 lots.
Kshitij Purohit, Product Manager, Currency & Commodities, CapitalVia Global Research Limited said: “The market has been extraordinarily weak due to strengthening US dollar. So with that in mind, we would be very cautious about jumping into the silver markets, but if sustain below Rs 63,000 levels then it is likely that we will go towards Rs 60,000 level whereas resistance is at Rs 66,000 level."
"Silver may witness choppy trade unless there is a clear trend in gold and industrial metals; however we expect gold to benefit from safe-haven buying amid rising coronavirus cases and this may support silver as well," said Kotak Securities.
At 0955 (GMT), the precious metal surged 0.91 percent quoting at $25.27 an ounce in New York.
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