Silver prices eased below Rs 71,500 per kg as gold and industrial trade weakened amid a recovery in the US dollar. The precious metal maintains downside to trade at day’s low after a gap-down start in the afternoon session.
The semi-precious metal has been trading higher than 50, 100 and 200 days’ moving averages but lower than the 5 and 20 days’ moving average on the daily chart. The momentum indicator Relative Strength Index (RSI) is at 51.55, which indicates sideways movement in the price.
The general improvement in the outlook for industrial demand is countered by mixed ETF activity and concerns about China’s crackdown on rising raw material prices.
Silver holdings in iShares ETF dropped by 28.9 tonnes to 17,961.01 tonnes. The fund NAV is trading at a premium of 1.22 percent.
The US dollar index rose to 90.13, up 0.21 percent against the major cross.
The spot gold/silver ratio currently stands at 68.34 to 1 indicating that silver has outperformed gold.
MCX Bulldesk slightly decreased 24 points or 0.16 percent, at 15,206 at 15:05. The index tracks the real-time performance of MCX Gold and MCX Silver futures.
“MCX Silver futures trade around the support level of moving average and LBMA trades toward the support level. Gold/silver ratio failed to settle below the support at the 50 EMA at 67.90 and moved back above the 68 levels”, said Kshitij Purohit, Product Manager, Currency & Commodities, CapitalVia Global Research Limited.
In the futures market, silver for July delivery touched an intraday high of Rs 71,750 and a low of Rs 71,225 per kg on the MCX. So far in the current series, the precious metal has touched a low of Rs 63,456 and a high of Rs 74,222.
Silver delivery for the July contract declined Rs 440, or 0.61 percent to Rs 71,377 per kg at 15:11 hours with a business turnover of 11,069 lots. The same for the September contract fell Rs 428, or 0.59 percent, to Rs 72,529 per kg with a turnover of 847 lots.
The value of July and September’s contracts traded so far is Rs 812.94 crore and Rs 46.67 crore, respectively.
Similarly, the Silver Mini contract for June slipped by Rs 409, or 0.57 percent at Rs 71,430 on a business turnover of 13,176 lots.
Silver may witness choppy trade unless gold gains direction hence we recommend waiting for corrective dips unless there are fresh triggers, said Kotak Securities.
At 0945 (GMT), the precious metal was down 0.87 percent quoting at $27.76 an ounce in New York.
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