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Silver prices fall to Rs 63,000 a kg on muted trend in gold, dollar ahead of Jackson Hole symposium

The outflow in ETF due to weak investor interest, a slowdown in the Chinese economy and manufacturing activities globally continue to weigh on silver prices.

Mumbai / August 26, 2021 / 04:12 PM IST

Silver prices on August 26 edged lower tracking a subdued trend in gold and dollar ahead of Fed chief Jerome Powell’s speech at the Jackson Hole symposium. The precious metal had fallen 0.5 percent yesterday on the COMEX.

The white metal extended loss after a gap-down start in the afternoon trade, tracking the weak overseas 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 39.93, which suggests a bearish movement in the price.

Investors now turn their attention towards Powell's speech on Friday at the central bank's annual economic symposium at Jackson Hole, Wyoming, which had to be moved online because of the COVID-19 surge.

The market will also focus today on the US GDP growth estimate and ECB’s monetary policy account which may impact currency movement and thereby commodities.

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The outflow in ETF due to weak investor interest, a slowdown in the Chinese economy and manufacturing activities globally continue to weigh on silver prices.

Sriram Iyer, senior Research Analyst at Reliance Securities said, “International silver prices are trading weaker this afternoon in Asia. Markets could look to cues from US GDP and jobless claims data tonight. Technically, LBMA Silver above the $23.50 level could see $24.10-$25.22 levels. Support is at $23.40-$22.65 levels.”

On the domestic front, technically MCX silver September above Rs 63,500 level could see Rs 64,000-64,900 levels. Support is at Rs 63,000-62,400 levels”, Iyer added.

Silver holdings in iShares ETF were unchanged at 16,978.71 tonnes, the lowest since November 2020. The fund NAV is trading at a premium of 0.38 percent.

The US dollar index traded slightly higher at 92.91, up 0.09 percent against the major cross in the afternoon session.

The spot gold-silver ratio stands at 75.36 to 1, indicating that silver has outperformed gold.

MCX Bulldesk fell by 27 points, or 0.19 percent, to 14,176 at 3:29 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 63,289 and a low of Rs 62,857 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 declined Rs 270, or 0.43 percent, to Rs 63,002 per kg at 3:31 pm with a business turnover of 5,760 lots. The same for December slipped Rs 242, or 0.38 percent, to Rs 63,714 per kg with a turnover of 6,349 lots.

The value of September and December’s contracts traded, so far, is Rs 473.58 crore and Rs 230.67 crore, respectively.

Similarly, the Silver Mini contract for August gained Rs 90, or 0.14 percent to Rs 62,958 on a business turnover of 1,371 lots.

Silver may witness choppy trade reflecting gold and industrial metals as Fed’s monetary outlook and China’s economic health is assessed. However, increasing demand concerns may keep prices pressurised, said Kotak Securities.

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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Sandeep Sinha
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