Silver prices dropped on August 25 tracking weakness in gold, a stronger dollar and increased risk appetite. The precious metal had soared 1 percent yesterday on the COMEX.
The white metal pared earlier losses after a gap-down start in the afternoon session, tracking the subdued global trend.
The semi-precious metal has been trading lower than 20, 50, 100 and 200 days’ moving averages but higher than the 5-day moving average on the daily chart. The momentum indicator Relative Strength Index (RSI) is at 41.42, suggesting a sell in the price.
Silver has been weighed down by ETF outflows, demand concerns due to a slowdown in the Chinese economy and manufacturing activity globally.
However, investors awaited Federal Reserve Chairman Jerome Powell's speech this week for guidance on the central bank's taper plans.
Sriram Iyer, senior Research Analyst at Reliance Securities said, “International silver prices are trading weaker this Wednesday early afternoon trade in Asia, tracking the strength of the dollar and weak gold prices. Technically, LBMA silver is above the $23.50 level could see momentum up to $24.10-$25.22 levels. Support is at $23.40-$22.65 levels.”
On the domestic front, technically MCX silver September is below Rs 63,500 level and now could witness a fall up to Rs 63,000-62,400 levels. Resistance is at Rs 64,000-64,900 levels”, Iyer stated.
Silver holdings in iShares ETF fell by 106.6 tonnes to 16,978.71 tonnes, the lowest since November 2020. The fund NAV is trading at a premium of 0.31 percent.
The US dollar index traded modestly higher at 92.92, up 0.02 percent against the major cross in the afternoon session.
The spot gold-silver ratio stands at 75.40 to 1, indicating that silver has outperformed gold.
MCX Bulldesk decreased by 67 points, or 0.47 percent, to 14,250 at 2:50 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 63,400 and a low of Rs 62,920 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 slides Rs 174, or 0.27 percent, to Rs 63,300 per kg at 2:55 pm with a business turnover of 6,247 lots. The same for December slumped Rs 197, or 0.31 percent, to Rs 64,000 per kg with a turnover of 6,091 lots.
The value of September and December’s contracts traded, so far, is Rs 618.69 crore and Rs 192.85 crore, respectively.
Similarly, the Silver Mini contract for August dropped Rs 196, or 0.30 percent to Rs 63,275 on a business turnover of 4,577 lots.
Kotak Securities said silver may waver along with gold and industrial metals as market players assess the Fed’s monetary policy outlook and health of the Chinese economy however demand concerns may keep pressure on price.
At 0930 (GMT), the precious metal declined 0.30 percent and was quoting at $23.82 an ounce in New York.
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