Silver prices dropped below Rs 67,000 per kg on August 6 as the US Dollar and the benchmark bond yield rebounded from the lows of the session along with gold's struggle for direction. The precious metal tumbled 0.66 percent yesterday on the COMEX.
The white metal traded extended decline after a gap-down start, tracking bearish global cues.
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 40.80, which indicates a sell in the price.
Silver along with gold prices continued to feel the effects of the hawkish comments by a US Federal Reserve official's for early tapering of the central bank's asset purchases ahead of a key jobs report.
The US Labour Department said that the number of Americans filing claims for unemployment benefits fell by 14,000 to seasonally adjusted 385,000 for the week ended July 31 as companies held on to workers amid a labour shortage.
Silver holdings in iShares ETF were unchanged for the second day at 17,202.02 tonnes. The fund NAV is trading at a discount of 1.20 percent.
The US dollar index jumped to 92.41, up 0.18 percent against the major cross in the afternoon session.
Sriram Iyer, Senior Research Analyst at Reliance Securities said, “International silver prices are trading in the red this Friday afternoon in Asian trade as the dollar held gains ahead of the much-anticipated U.S. jobs data, while a growing number of Federal Reserve officials signalled the possibility of a sooner-than-expected policy tightening. Technically, LBMA Silver holds a resistance of 21-Daily Moving Average at $25.65 below which could see a downside move up to $25.00-$24.30 levels. Resistance is at $25.50-$25.90 levels.”
“Domestic silver prices traded in the red this Friday afternoon, tracking overseas prices. Technically, MCX Silver September holds a resistance of Rs 67,700-68,200 levels. Support is at Rs 66,300-65,900 levels,” Iyer stated.
The spot gold/silver ratio currently stands at 71.80 to 1 indicating that gold has outperformed silver.
MCX Bulldesk slumped 44 points, or 0.30 percent, to 14,468 at 15:39. 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 66,982 and a low of Rs 66,629 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 fell by Rs 343, or 0.51 percent to Rs 66,655 per kg at 15:40 hours with a business turnover of 9,919 lots. The same for the December contract decreased Rs 325, or 0.48 percent, to Rs 67,529 per kg with a turnover of 2,704 lots.
The value of September and December’s contracts traded so far is Rs 526.23 crore and Rs 35.71 crore, respectively.
Similarly, the Silver Mini contract for August edged lower Rs 328, or 0.49 percent at Rs 66,915 on a business turnover of 19,651 lots.
Kshitij Purohit, Product Manager, Currency & Commodities, CapitalVia Global Research Limited said, “MCX Silver has resumed on a negative note and the resistance is at 15-SMA of hourly chart placed near Rs 67,111 whereas support holds near previous session’s low at Rs 66,700.”
At 1015 (GMT), the precious metal was down 0.83 percent and was quoting at $25.08 an ounce in New York.
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