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Silver prices drop on weak industrial demand, sluggish gold

Technically, LBMA Silver holds a resistance of 21-Daily Moving Average at $25.65 below which could see a downside move up to $25.10-$24.30 levels.

Mumbai / August 03, 2021 / 03:54 PM IST

Silver prices declined on August 3 on demand uncertainty, weakness in gold and industrial metals. The precious metal had marginally risen 0.1 percent yesterday on the COMEX.

The white metal traded in red after a gap-down start in the afternoon session on weak global cues.

The semi-precious metal has been trading higher than 200-day moving averages but lower than the 5, 20, 50, and 100 days’ moving averages on the daily chart. The momentum indicator Relative Strength Index (RSI) is at 46.20, which suggests subdued movement in the price.

The Institute for Supply Management’s July manufacturing index fell to a six-month low due to broad shortages and construction spending was up 0.1% in June.

Silver holdings in iShares ETF were unchanged at 17,209.46 tonnes. The fund NAV is trading at a discount of 0.05 percent.

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The US dollar index trades weaker at 91.99, down 0.08 percent against the major cross in the afternoon session.

Sriram Iyer, Senior Research Analyst at Reliance Securities said, “International silver prices have started flat to weak this Tuesday morning and early afternoon Asian trade and will track the movements of the dollar and bond yields. Technically, LBMA Silver holds a resistance of 21-Daily Moving Average at $25.65 below which could see a downside move up to $25.10-$24.30 levels. Resistance is at $25.77-$26.00 levels.”

“Technically, MCX Silver September holds a resistance 68200-69000 levels. Support is at 67100-66700 levels”, he added.

The spot gold/silver ratio currently stands at 71.11 to 1 indicating that silver has outperformed gold.

MCX Bulldesk was down 49 points, or 0.33 percent, to 14,607 at 15:18. 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 67,700 and a low of Rs 67,283 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 slipped Rs 208, or 0.31 percent to Rs 67,681 per kg at 15:19 hours with a business turnover of 9,076 lots. The same for the December contract eased Rs 229, or 0.33 percent, to Rs 68,521 per kg with a turnover of 1,993 lots.

The value of September and December’s contracts traded so far is Rs 740.96 crore and Rs 70.31 crore, respectively.

Similarly, the Silver Mini contract for August slides Rs 234, or 0.34 percent at Rs 67,858 on a business turnover of 18,012 lots.

Kshitij Purohit, Product Manager, Currency & Commodities, CapitalVia Global Research Limited said, “MCX Silver is trading with sideways to moderately negative momentum resisting below the 15-SMA of hourly chart placed near Rs 67,737. The key support is at Rs 67,170.

At 0952 (GMT), the precious metal fell 0.30 percent and was quoting at $25.49 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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