Silver prices settled steady at Rs 68,601 per kg on April 16 as participants reduced their positions as seen by the open interest. The precious metal rose tracking gains in gold and dollar weakness.
It ended the week with a gain of Rs 1,661 or 2.48 percent on the domestic bourse. Silver prices rose in three out of the five trading sessions on the MCX.
The semi-precious metal has been trading higher than 5, 20, 50, 100 and 200 days’ moving averages on the daily chart. The momentum indicator Relative Strength Index (RSI) is at 60.04 which indicates bullish movement in prices.
Both gold and silver prices are on their way for second consecutive weekly gains. Again, like last week, the movement of the US Dollar and benchmark Treasury yields influenced prices. The white metal prices were also supported by strong economic data from the US and China boosting industrial metal demand.
India’s silver import during 2020-21 declined 71 percent to about $791 million, according to Commerce Ministry data.
Sriram Iyer, Senior Research Analyst at Reliance Securities said, “LBMA Silver Spot is trading above all major Daily Moving Averages indicating a strong uptrend up to $26.90-$28.30 levels. Support is at $25.30-$24.30 levels. Domestically, MCX Silver has sustained above Rs 66,500 support levels and could see a bullish rally up to Rs 69,500-71,600 levels.”
Reliance Securities advises its clients to buy Silver May near Rs 68,000 with a stop loss of Rs 66,500 and a target of Rs 71,000.
Silver holdings in iShares ETF were unchanged at 17,845.47 tonnes, the lowest level since January 28. The fund NAV is trading at a discount of minus 0.70 percent.
The US dollar index closed marginally lower at 91.53, down 0.10 percent on April 16 against a basket of six rival currencies. The dollar index ended with a loss of 0.67 percent during the week.
The spot gold/silver ratio currently stands at 68.43 to 1 indicating that gold has outperformed silver.
MCX Bulldesk increased 73 points or 0.49 percent to close at 14,850. The index tracks the real-time performance of MCX Gold and MCX Silver futures.
In the futures market, silver for May delivery touched an intraday high of Rs 69,271 and a low of Rs 67,990 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 was slightly up by Rs 62, or 0.09 percent to settle at Rs 68,602 per kg with a business turnover of 8,843 lots. The same for the July contract gained by Rs 116, or 0.17 percent, to Rs 69,728 per kg with a turnover of 1,224 lots.
The value of May and July’s contracts traded on April 9 was Rs 2,682.70 crore and Rs 160.20 crore, respectively.
Similarly, the Silver Mini contract for April edged up by Rs 51, or 0.07 percent at Rs 68,601 on a business turnover of 11,043 lots.
The precious metal settled with a gain of 0.26 percent at $26.03 an ounce in New York.
Next Week Outlook
Kshitij Purohit, Product Manager, Currency & Commodities, CapitalVia Global Research Limited
Strategy: Silver traded firm along with the gold and sustained above 50 days SMA placed at 67250. For the coming week, traders can buy silver near Rs 68,200-68,100 regions with a stop loss of Rs 67,500 for the target of Rs 70,500.
Rationale: Silver future traded with strong momentum and crossed resistance of 50 days SMA, we are much more likely to see a bullish trend as prices closed above this level and it will also act as strong support for the shorter term.
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