Silver prices plummet to Rs 67,724 per kg on February 4 as participants increased their short positions as seen by the open interest. The precious metal had gained 1.8 percent yesterday on the COMEX.
The white metal has come under pressure lately as the retail buying frenzy subsided with exchange raising margin requirement to curb volatility and US Treasury Secretary summoning financial regulators to discuss the recent market volatility.
The US private payrolls rebounded more than expected, suggesting the labour market recovery was back on track also weighed on the price.
Silver holdings in iShares ETF decreased by 248.5 tonnes to 20,819.35 tonnes, the first drop in four days.
The US dollar index trades firm at 91.44 levels, up 0.33 percent in the afternoon trade.
MCX iCOMDEX Bullion Index declined 152.67 points, or down 1.01 percent, at 14,952.09 at 15:05. The index tracks the real-time performance of MCX Gold and MCX Silver futures.
Sriram Iyer, Senior Research Analyst at Reliance Securities said, “International silver prices are trading marginally weaker this Thursday morning and early afternoon trade in Asia. However, downside remained capped as hopes of stimulus measures could prompt a pick-up in industrial demand.”
“Technically, LBMA Silver Spot continued to trade on a negative note near $26.60 levels indicating a sideways to bearish momentum to continue. The range for the rest of the session will be between $26.00-$27.80 levels”, he said.
In the futures market, silver for March delivery touched an intraday high of Rs 68,184 and a low of Rs 67,227 per kg on the MCX. So far in the current series, the precious metal has touched a low of Rs 54,386 and a high of Rs 79,980.
Silver delivery for March contract edged lower Rs 841, or 1.23 percent to Rs 67,724 per kg at 15:08 hours with a business turnover of 12,810 lots. The same for the May contract slipped Rs 862, or 1.24 percent, to Rs 68,760 per kg with a turnover of 1,327 lots.
The value of March and May’s contracts traded so far is Rs 1,723.72 crore and Rs 53.61 crore, respectively.
The spot gold/silver ratio currently stands at 68.50 to 1 indicating that gold has outperformed silver.
Domestic silver prices are trading weaker this Thursday morning and early afternoon trade, tracking weak overseas prices. Technically, MCX Silver March holds the support of 21-Daily Moving Average at Rs 67,300 levels. The range for the rest of the session will be between Rs 67,000-69,800 levels, said Iyer.
Kotak Securities said silver has corrected about 13 percent from recent highs reversing some of the gains noted in the last few days. Given the ease of retail buying, weakness in gold, and choppiness in industrial metals we expect the silver price to remain under pressure.
At 09:42 (GMT), the precious metal was down 1.31 percent quoting at $26.53 an ounce in New York.
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