Silver prices traded in the red on Friday afternoon trade, tracking weak gold prices and sharp appreciation in the rupee. The white metal turned choppy along with gold as market participants assess the possibility of monetary tightening by the Fed and other central banks.
The ETF inflows, weakness in dollar and Treasury yields lent support and capped downside.
The semi-precious metal has been trading higher than 20, 50, 100 and 200 days’ moving averages but lower than the 5-day moving average on the daily chart. The momentum indicator Relative Strength Index (RSI) is at 57.80, which indicates positive sentiment in the price.
Silver holdings in iShares ETF jumped by 40.4 tonnes to 17,821.15 tonnes, the highest since April 16. The fund NAV is trading at a premium of 0.18 percent.
The US dollar index traded lower at 89.65, down 0.15 against its rivals and was headed for a weekly loss; whereas US 10-year Treasury yields fell to 1.63 percent.
The spot gold/silver ratio currently stands at 67.53 to 1 indicating that silver has outperformed gold.
MCX Bulldesk slumped 48 points or 0.31 percent, at 15,199 at 15:56. The index tracks the real-time performance of MCX Gold and MCX Silver futures.
Sriram Iyer, Senior Research at Reliance Securities said, “Technically, LBMA Silver is holding well above $27.00 level could trade on bullish momentum up to $28.20-$28.90 levels. Support is at $27.25-$26.77 levels.”
Technically, MCX Silver July has given a breakout at Rs 72000 can take prices up to 73200-74000 levels. Support is at 71500-70400 levels”, Iyer added.
In the futures market, silver for July delivery touched an intraday high of Rs 72,030 and a low of Rs 71,544 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 74,222.
Silver delivery for the July contract slipped Rs 358, or 0.50 percent to Rs 71,946 per kg at 16:00 hours with a business turnover of 10,751 lots. The same for the September contract dropped Rs 334, or 0.46 percent, to Rs 73,030 per kg with a turnover of 366 lots.
The value of July and September’s contracts traded so far is Rs 1,054.19 crore and Rs 32.79 crore, respectively.
Similarly, the Silver Mini contract for June declined by Rs 377, or 0.52 percent at Rs 71,946 on a business turnover of 14,947 lots.
Silver may witness choppy trade unless there is a clear trend in gold and industrial metals however price may remain under pressure if economic data confirm a slowdown in manufacturing activity globally, said Kotak Securities.
Kshitij Purohit, Product Manager, Currency & Commodities, CapitalVia Global Research Limited said, “Silver is trading in sideways mode below the resistance of 15-SMA of intraday chart placed at Rs 72,050. Gold/silver ratio has recently tried to settle above the resistance at the 50 EMA at 67.80 but lost momentum and pulled back towards the 20 EMA at 67.30.”
At 1037 (GMT), the precious metal was down 0.48 percent quoting at $27.93 an ounce in New York.
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