Silver prices declined below Rs 68,000 per kg on July 19 as the dollar index crossed the 93 mark and broader selloff across asset class on rising cases of Delta variant of coronavirus in Asia. The precious metal had fallen by Rs 1,056 or 1.52 percent last week on the MCX.
The white metal pared extended loss to trade at day’s low after a negative start in the afternoon session.
The semi-precious metal has been trading lower than 5, 20, 50 and 100 days’ moving averages but higher than the 200-days’ moving averages on the daily chart. The momentum indicator Relative Strength Index (RSI) is at 40.12, which indicates a bearish movement in the price.
According to CFTC data, speculators cut their net long positions in silver futures and options positions by 879 contracts to 34,678 in the week to July 13.
Silver holdings in iShares ETF fell by 40.36 tonnes to 17,226.74 tonnes, the first fall in four days. The fund NAV is trading at a discount of 1.80 percent.
The US dollar index touched 93.02, up 0.32 percent.
Sriram Iyer, Senior Research Analyst at Reliance Securities said, “In other precious metals, international silver prices are trading in the red on Monday afternoon trade in Asia, tracking stronger US Dollar. Technically, LBMA Silver holds a 21-Daily Moving Average near $26.00 level below which could take prices to $25.20-$24.70 levels while resistance is at $25.90-$26.40 levels.”
“Domestic silver prices are trading in the red on Monday early afternoon trade, tracking overseas prices. Technically, MCX Silver September below Rs 68,000 could see Rs 67,800-67,000 levels. Resistance is at Rs 68,700-69,400 levels,” he added.
The spot gold/silver ratio also known as mint ratio currently stands at 71.07 to 1 indicating that gold has outperformed silver. The rise in gold/silver ratio is a negative sign for silver prices.
MCX Bulldesk slumped 56 points, or 0.38 percent, to 14,662 at 15:16. 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 68,121 and a low of Rs 67,550 per kg on the MCX. So far in the current series, the precious metal has touched a low of Rs 67,550 and a high of Rs 75,215.
Silver delivery for the September contract slides Rs 539, or 0.79 percent to Rs 67,780 per kg at 15:17 hours with a business turnover of 13,430 lots. The same for the December contract declined Rs 615, or 0.88 percent, to Rs 69,040 per kg with a turnover of 623 lots.
The value of September and December’s contracts traded so far is Rs 1,003.58 crore and Rs 31.73 crore, respectively.
Similarly, the Silver Mini contract for August slipped Rs 519, or 0.76 percent at Rs 68,034 on a business turnover of 20,158 lots.
Kshitij Purohit, Product Manager, Currency & Commodities, CapitalVia Global Research Limited said, “MCX Silver is trading below the resistance of 15-SMA of hourly chart placed near Rs 68,847. The support is at the psychological level of Rs 68,000. The overall trend is likely to be sideways to marginally bearish in today’s session.”
At 0951 (GMT), the precious metal was down 1.27 percent and was quoting at $25.46 an ounce in New York.
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