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Silver prices trade below Rs 68,000/kg on subdued global cues, investors cut net long position

The spot gold/silver ratio currently stands at 71.15 to 1 indicating that silver has outperformed gold.

Mumbai / August 02, 2021 / 04:23 PM IST

Silver prices were trading marginally lower on August 2 tracking weakness in gold despite subdued dollar. The precious metal had risen 1.23 percent last week on the MCX.

The white metal traded in red after a gap-up start in the afternoon session on a muted global trend.

The semi-precious metal has been trading higher than 5 and 200 days’ moving averages but lower than the 20, 50, and 100 days’ moving averages on the daily chart. The momentum indicator Relative Strength Index (RSI) is at 47.32, which suggests weaker movement in the price.

According to US CFTC data, COMEX silver speculators cut the net long positions by 5,059 contracts to 21,189 in the week to July 27.

The personal consumption expenditures (PCE) price `index rose 0.4 percent in June after advancing 0.5 percent in May.

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In the 12 months through June, the core PCE price index shot up 3.5 percent. The core PCE price index increased 3.4 percent year-on-year in May.

Silver holdings in iShares ETF rose by 31.7 to 17,209.46 tonnes. The fund NAV is trading at a discount of 0.01 percent.

The US dollar index trades lower at 91.94, down 0.27 percent against the major cross in the afternoon session.

Sriram Iyer, Senior Research Analyst at Reliance Securities said, “Technically, LBMA Silver holds a resistance of 21-Daily Moving Average at $25.65 and below which could pull prices to $25.10-$23.95 levels. Resistance is at $25.77-$26.00 levels. “

“Domestic silver prices are trading flat on Monday early afternoon trade, tracking overseas prices. 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 71.15 to 1 indicating that silver has outperformed gold.

MCX Bulldesk was down 33 points, or 0.23 percent, to 14,615 at 15:31. 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 68,177 and a low of Rs 67,634 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 Rs 51, or 0.08 percent to Rs 67,792 per kg at 15:33 hours with a business turnover of 8,663 lots. The same for the December contract gained Rs 32, or 0.05 percent, to Rs 68,709 per kg with a turnover of 1,701 lots.

The value of September and December’s contracts traded so far is Rs 504.12 crore and Rs 65.35 crore, respectively.

Similarly, the Silver Mini contract for August dropped Rs 34, or 0.05 percent at Rs 68,033 on a business turnover of 17,334 lots.

Kshitij Purohit, Product Manager, Currency & Commodities, CapitalVia Global Research Limited said, “MCX is trading with sideways momentum in the range of Rs 67,800-67,950. LMBA Silver spot is trading with positive around the level of $25.50. The key support would be at Rs 67,640 whereas resistance holds near Rs 68,450.

At 1013 (GMT), the precious metal eased 0.13 percent and was quoting at $25.51 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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