Silver prices tumbled to Rs 69,749 per kg on April 22 as participants reduced their positions as seen by the open interest. The precious metal had gained 2.8 percent on April 21 on the COMEX.
The white metal extended decline after a gap-down start in the afternoon session to trade at day’s low tracking weak global cues and subdued trends in gold and industrial metals.
The semi-precious metal has been trading higher than 5, 20, 50, 100 and 200 days’ moving averages on the daily chart. The momentum indicator Relative Strength Index (RSI) is at 61.95 which indicates bullish movement in prices.
Silver has rallied sharply along with gold in the last few days on the back of lower bond yields and weakness in the US dollar.
Silver holdings in iShares ETF stand at 17,715.59 tonnes, the lowest level since January 28. The fund NAV is trading at a premium of 2.73 percent.
The US dollar index traded marginally lower at 91.04, up 0.09 percent in the afternoon trade against the major cross.
The spot gold/silver ratio currently stands at 67.81 to 1 indicating that silver has outperformed gold.
MCX Bulldesk dropped 119 points or 0.79 percent, at 15,010 at 15:37. The index tracks the real-time performance of MCX Gold and MCX Silver futures.
Sriram Iyer, Senior Research at Reliance Securities said, “In other precious metals, international silver edged down this early afternoon trade in Asia. Technically, LBMA Silver Spot has given a breakout above $26 level and could trade on a positive note within the range of $25.80-$27.10 levels.”
Technically, MCX Silver is indicating upside movement up to Rs 70,800-71,700 levels. Support is at Rs 69,400-68,800 levels. Iyer advised his clients to buy May Silver futures near Rs 69,500 with a stop loss of Rs 68,800 and a target of Rs 71,000.
In the futures market, silver for May delivery touched an intraday high of Rs 70,399 and a low of Rs 69,563 per kg on the MCX. So far in the current series, the precious metal has touched a low of Rs 59,826 and a high of Rs 75,501.
Silver delivery for the May contract dropped Rs 589, or 0.84 percent to Rs 69,749 per kg at 15:41 hours with a business turnover of 9,351 lots. The same for the July contract slipped Rs 582, or 0.81 percent, to Rs 70,840 per kg with a turnover of 1,528 lots.
The value of May and July’s contracts traded so far is Rs 1,141.36 crore and Rs 149.88 crore, respectively.
Similarly, the Silver Mini contract for April edged lower by Rs 514, or 0.73 percent at Rs 69,779 on a business turnover of 10,331 lots.
“LBMA Silver has given a breakout above $26 and may trade on a positive note within the range of $25.95-27.25. The key support in MCX Silver is at Rs 69,400-69,600,” said Kshitij Purohit, Product Manager, Currency & Commodities, CapitalVia Global Research Limited.
Silver may trade with a positive bias along with gold; however price has already rallied too sharply and ETF outflows show a lack of investor confidence hence some caution is recommended, said Kotak Securities.
At 1016 (GMT), the precious metal was down 0.40 percent quoting at $26.46 an ounce in New York.
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