Silver prices dip below Rs 62,000 a kg on dollar uptick; Gold-silver ratio nears 77

Silver prices marginally fell on August 20 on concerns about demand, firm dollar and muted trend in gold. The precious metal had declined 0.8 percent yesterday on the COMEX.

The white metal turned weaker in the afternoon trade after a gap-up start, tracking the subdued global cues.

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 30.30, which indicates weakness in the price.

Kshitij Purohit, Product Manager, Currency & Commodities, CapitalVia Global Research Limited said, “The dollar broke out, causing silver prices to fall. Riskier assets such as equity swung back and forth, causing volatility that aided the greenback’s advances. The stronger-than-expected jobless claims in the US failed to boost Treasury yields. MCX Silver has support at Rs 61,500-61,300 while resistance is at Rs 63,500-64,000.”

Silver holdings in iShares ETF dropped by 43.2 tonnes to 17,167.45 tonnes, the lowest since December 2020. The fund NAV is trading at a discount of 0.52 percent.

The US dollar index rose to 93.66, up 0.09 percent against the major cross in the afternoon session. The rising demand for the US currency as a safe haven dented appeal for the
dollar-priced commodities and dragged prices lower.

The spot gold-silver ratio currently stands at 76.99 to 1, indicating that gold has outperformed silver.

MCX Bulldesk mildly eased 20 points, or 0.14 percent, to 14,099 at 15:33 hours. The index tracks the real-time performance of MCX Gold and MCX Silver futures.

In the futures market, silver for September delivery touched an intraday high of Rs 63,320 and a low of Rs 61,796 per kg on the MCX. So far in the current series, the precious metal has touched a low of Rs 61,536 and a high of Rs 75,215.

Silver delivery for the September contract dipped Rs 227, or 0.37 percent to Rs 61,906 per kg at 15:35 hours with a business turnover of 10,613 lots. The same for the December contract declined Rs 227, or 0.36 percent, to Rs 62,690 per kg with a turnover of 5,928 lots.

The value of September and December’s contracts traded so far is Rs 657.53 crore and Rs 85.96 crore, respectively.

Similarly, the Silver Mini contract for August slumped Rs 270, or 0.43 percent to Rs 62,174 on a business turnover of 20,105 lots.

Kotak Securities said silver remains in a broad range amid stable gold prices and volatile industrial metals. However, general bias remains weak amid increasing demand concerns.

At 1009 (GMT), the precious metal was down 0.65 percent and was quoting at $23.08 an ounce in New York.

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