Silver prices down marginally to Rs 65,984 per kg on weak economic data, strong dollar

Silver

Silver prices slipped half a percent to Rs 65,984 per kg on March 23 tracking muted trend in gold and a stronger dollar.

The white metal extended decline after a gap-down start in the afternoon session to trade at the day’s low. It had shed over 2 percent yesterday on the COMEX.

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 43.01 which indicates bearish momentum in prices.

Silver prices were weighed down by disappointing US economic data and concerns about selling pressure in Chinese equities.

Silver holdings in iShares ETF fell by 80.8 tonnes to 18,221.86 tonnes. The fund NAV is trading at a premium of 0.18 percent.

The US dollar index crossed above 92 marks, up 0.41 percent in the afternoon trade against the major cross.

The spot gold/silver ratio currently stands at 68.16 to 1 indicating that gold has outperformed silver.

MCX Bulldesk eased 28 points or 0.20 percent, at 14,199 at 15:21. The index tracks the real-time performance of MCX Gold and MCX Silver futures.

Sriram Iyer, Senior Research Analyst at Reliance Securities said, “International spot silver prices are trading weak this Tuesday morning and early afternoon trade in Asia. Technically, LBMA Silver Spot is trading near 100-Daily Moving Average at $25.60 levels from where a bounce-back can be expected up to $26.20-$26.65 levels.”

“Technically, MCX Silver May is trading below the pivotal level at Rs 66,300 which now could pull prices to the support level at Rs 65,700. However, a trade above could push prices towards the resistance level at 66800,” Iyer added.

In the futures market, silver for May delivery touched an intraday high of Rs 66,275 and a low of Rs 65,911 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 declined Rs 347, or 0.52 percent to Rs 65,984 per kg at 15:25 hours with a business turnover of 11,910 lots. The same for the July contract slipped Rs 293, or 0.44 percent, to Rs 67,041 per kg with a turnover of 183 lots.

The value of May and July’s contracts traded so far is Rs 756.53 crore and Rs 2.61 crore, respectively.

Similarly, the silver mini contract for April edged lower Rs 241, or 0.36 percent at Rs 66,220 on a business turnover of 20,721 lots.

Kshitij Purohit, Product Manager, Currency & Commodities, CapitalVia Global Research said: “MCX Silver May showed a negative movement and trade near Rs 66,500 levels. Market participants and traders were exceedingly pleased by the FOMC press conference, which sparked a rally in both US equities as well as gold and silver prices, but if it sustains below Rs 65,500 levels then it is very likely that we will go towards the Rs 64,000 level. Silver has downside support at Rs 63,500 level whereas resistance is at Rs 68,500 levels.”

Silver may witness choppy trade as both gold and industrial metals struggle for direction. However, we expect gold to benefit from loose monetary policy stance as well as persisting virus concerns and this may support silver as well, Kotak Securities said in a note.

At 1002 (GMT), the precious metal was down 0.75 percent quoting at $25.57 an ounce in New York.

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