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Silver prices decline on weak gold cues, stronger US dollar

The momentum indicator Relative Strength Index (RSI) is at 45.64, which suggests a sell in the price.

Mumbai / October 05, 2021 / 03:55 PM IST

Silver prices dipped on September 1 on firm dollar, weakness in industrial metals and gold. The precious metal remained unchanged yesterday on the COMEX.

The white metal traded in the red after a gap-down start in the afternoon session, tracking the subdued global trend.

The semi-precious metal has been trading higher than the 5-day moving averages but lower than the 20, 50, 100 and 200 days’ moving averages on the daily chart. The momentum indicator Relative Strength Index (RSI) is at 45.64, which suggests a sell in the price.

Kshitij Purohit, Product Manager, Currency & Commodities, CapitalVia Global Research said, “The US currency definitely has an impact, as the US dollar has a significant negative correlation with silver, therefore keep an eye on US Dollar Index. On the other hand, if we can break above the 50 days SMA then the market is likely to go much higher, perhaps reaching toward Rs 64,000, maybe even Rs 67,000.”

“The way the market looks right now though, it certainly looks as if we are probably going to continue to limp along”, he added.

Close

Investors look forward to the August US non-farm payrolls data due later in the week for further direction.

Silver holdings in iShares ETF rose by 155.58 tonnes to 17,134.29 tonnes. The fund NAV is trading at a discount of 0.60 percent.

The US dollar index traded firm at 92.68, up 0.05 percent against the major cross in the afternoon session.

The spot gold-silver ratio stands at 75.88 to 1, indicating that gold has outperformed silver.

MCX Bulldesk increased by 6 points, or 0.04 percent, to 14,147 at 3:18 pm. The index tracks the real-time performance of MCX Gold and MCX Silver futures.

In the futures market, December silver delivery touched an intraday high of Rs 63,295 and a low of Rs 62,828 per kg on the MCX. So far in the current series, the precious metal has touched a low of Rs 62,010 and a high of Rs 74,127.

Silver delivery for the December contract dipped Rs 116, or 0.18 percent, to Rs 63,250 per kg at 3:20 pm with a business turnover of 11,429 lots. The same for March slipped Rs 180, or 0.28 percent, to Rs 64,089 per kg with a turnover of 88 lots.

The value of December and March’s contracts traded, so far, is Rs 438.95 crore and Rs 14.00 crore, respectively.

Similarly, the Silver Mini contract for November fell Rs 152, or 0.24 percent to Rs 63,461 on a business turnover of 21,455 lots.

Sriram Iyer, Senior Research Analyst at Reliance Securities said, “Technically COMEX December Silver resistances are $24.475 and $24.681 whereas supports are at $24.03 and $23.80.

At 0955 (GMT), the precious metal dropped 0.39 percent and was quoting at $23.91 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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