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Silver prices jump on strong industrial demand; focus shift to Fed policy decision

Technically, LBMA Silver could trade within the range of $24.20-$25.30 levels

Mumbai / July 28, 2021 / 03:47 PM IST

Silver prices traded moderately higher on Wednesday, tracking strong global cues and firmness in industrial metal. The precious metal had slipped 2.64 percent yesterday on the COMEX.

The white metal traded in the positive territory after a gap-up start in the afternoon session.

The semi-precious metal has been trading lower than 5, 20, 50, 100 and 200 days’ moving averages on the daily chart. The momentum indicator Relative Strength Index (RSI) is at 35.79, which suggests weakness in the price.

The U.S. Dollar and the benchmark treasury yields traded with a softer bias ahead of Wednesday’s Federal Reserve announcement on monetary policy and lent support.

Traders await the conclusion of a two-day meeting of Fed policymakers that began Tuesday.

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Silver holdings in iShares ETF were unchanged for the third day at 17,275.76 tonnes. The fund NAV is trading at a discount of 1.40 percent.

The US dollar index was marginally up at 92.47, up 0.04 percent against the major cross.

Sriram Iyer, Senior Research Analyst at Reliance Securities said, “International spot gold and silver prices have started flat to marginally higher this Wednesday morning and early afternoon in Asian trade ahead of Fed’s decision tonight. Technically, LBMA Silver could trade within the range of $24.20-$25.30 levels.”

“On the domestic front, MCX Silver September resistances are at Rs 66,300 and Rs 67,000. Supports are at Rs 65,700 and Rs 65,000”, Iyer noted.

The spot gold/silver ratio currently stands at 72.52 to 1 indicating that gold has outperformed silver. The rise in the mint ratio is a negative sign for silver prices.

MCX Bulldesk modestly fell 15 points, or 0.10 percent, to 14,465 at 15:21. 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 66,492 and a low of Rs 66,060 per kg on the MCX. So far in the current series, the precious metal has touched a low of Rs 65,656 and a high of Rs 75,215.

Silver delivery for the September contract gained Rs 164, or 0.25 percent to Rs 66,220 per kg at 15:23 hours with a business turnover of 12,627 lots. The same for the December contract jumped Rs 202, or 0.30 percent, to Rs 67,200 per kg with a turnover of 1,446 lots.

The value of September and December’s contracts traded so far is Rs 735.41 crore and Rs 52.00 crore, respectively.

Similarly, the Silver Mini contract for August rose Rs 115, or 0.17 percent at Rs 66,435 on a business turnover of 23,144 lots.

At 0955 (GMT), the precious metal soared 0.71 percent and was quoting at $24.82 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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