Silver prices were steady at Rs 68,600 per kg on February 19 as participants increased their long positions as seen by the open interest. The precious metal had gained 0.90 percent on February 18 on the NYMEX.
The white metal pared losses after a gap-down start in the afternoon session tracking weak dollar.
Silver outperformed gold in the last few days as it benefitted from expectations that global economic recovery may boost industrial demand. However, continuing sell-off in gold and mixed trade in industrial metals pressurised silver as well.
Silver holdings in iShares ETF fell by 179.1 tonnes to 19,315.48 tonnes, the lowest since February 1.
The US dollar index trades lower at 90.24 levels, down 0.39 percent in the afternoon trade.
MCX iCOMDEX Bullion Index eased 18.17 points, or down 0.12 percent, at 14,703.41 at 16:17 pm. 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 also fell on Friday morning and early afternoon trade in Asia. Technically, LBMA Silver Spot below $27.00 and will continue downside to sideways momentum up to $26.55-$26.20 levels. Resistance is at $27.90-$28.29 levels.”
"Domestic silver prices extended losses this Friday morning and early afternoon trade, tracking overseas prices. Technically, MCX Silver March below 68,000 levels indicating a sideways to marginal downside momentum to continue up to 67,100-66,600 levels. Resistance is at 68,500-69,000 levels”, Iyer added.
In the futures market, silver for March delivery touched an intraday high of Rs 68,780 and a low of Rs 67,530 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 gained Rs 106, or 0.15 percent to Rs 68,600 per kg at 16:19 hours with a business turnover of 12,377 lots. The same for the May contract rose Rs 109, or 0.16 percent, to Rs 69,740 per kg with a turnover of 2,605 lots.
The value of March and May’s contracts traded so far is Rs 1,806.85 crore and Rs 143.93 crore, respectively.
The spot gold/silver ratio currently stands at 65.32 to 1 indicating that silver has outperformed gold.
"Silver may remain under pressure amid general sell-off in gold and weaker investor interest; however, we do not expect a sharp fall in gold and this may limit losses in silver as well," said Kotak Securities.
At 10:53 (GMT), the precious metal was up 0.40 percent, quoting at $27.18 an ounce in New York.
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