Silver futures slide 3.08% to Rs 56,686 per kg on weak global cues

Silver prices slid to Rs 56,686 per kg on September 24 as participants increased their short positions. Precious metals traded sideways to lower weighed down by firmness in the Dollar Index and weakness in equity indices.

Prices fell sharply amid concurrent sell-off in gold and industrial metals. Also weighing on prices is weak US Composite Purchasing Managers Index flash reading, which slipped to 54.4 in September from 54.6 in the prior month, signalling a slower pace of growth.

The Dollar Index, measured against a basket of six currencies, was marginally up 0.02 percent to 94.47.

Silver holdings in iShares ETF decreased by 63.7 tonne to 17,214.03 tonne.

US Federal Reserve Vice Chair Richard Clarida said on September 23 that the US economy remains in a 'deep hole' and not going to increase interest rates until inflation hits 2 percent. The main cause of concern for the US economy is joblessness and weak demand.

MCX iCOMDEX Bullion Index declined 132.73 points, or 0.88 percent, at 14,947.40 at 14:42 hours. The index tracks the real-time performance of MCX Gold and MCX Silver futures.

In the futures market, silver for December delivery touched an intraday high of Rs 57,900 and a low of Rs 56,020 per kg on the Multi-Commodity Exchange (MCX). So far in the current series, the precious metal has touched a low of Rs 49,415 and a high of Rs 79,723.

Silver futures for December delivery slipped Rs 1,802, or 3.08 percent, to Rs 56,686 per kg at 14:44 hours on a business turnover of 15,819 lots. The same for the March delivery edged lower Rs 1,761, or 2.93 percent, to Rs 58,338 per kg on a turnover of 624 lots.

The value of December and March contracts traded so far is Rs 2,442.31 crore and Rs 31.64 crore, respectively.

The spot gold-to-silver ratio currently stands at 83.76 to 1, which means the amount of silver required to buy one ounce of gold.

Anuj Gupta- DVP- Commodities and Currencies Research, Angel Broking, said, “Traders can sell silver at Rs 57,500 levels, with a stop loss at Rs 58,700 and a target of Rs 56,000 levels."

At 09:19 (GMT), the precious metal was down 3.96 percent at $22.19 an ounce in New York.