Silver prices fell for the second day on June 15 on dollar uptick, choppiness in gold and selloff in industrial metals. The precious metal's price was also impacted by uncertainty about Federal Reserve’s monetary policy.
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 50.09, which indicates sideways movement in the price.
The white metal demand is expected to jump 11 percent in 2021 led by industrial use and physical silver investment, said Silver Institute. Global silver demand is projected to attain a six-year high of 1.025 billion ounces in 2021, it said.
Hareesh V, Head of Commodity Research, Geojit Financial Services said, “Concerns over investment demand continue to hit the sentiment of the commodity. A recovery in the US greenback and strong global equities limiting the metal’s demand as a safe haven investment. However, possible industrial demand recovery from China, EU and US likely to dent major downside in the metal.”
He said on the MCX, initial trades are most likely inside the Rs 74,500-69,500 levels and breaking any of the sides would suggest a fresh short term direction to the commodity.
Silver holdings in iShares ETF rose by 46.2 tonnes to 17,946.59 tonnes, the first inflow since June 3. The fund NAV is trading at a premium of 0.45 percent.
The US dollar index modestly surged to 90.49, up 0.05 percent against the major cross.
“In other precious metals, international silver prices are trading with small cuts on Tuesday early afternoon trade in Asia. Technically, LBMA Silver is trading below $28.00 which is a signal for the continuation of the current bearish momentum up to $27.20-$26.70 levels. However, a trade above could push prices to $28.55 levels”, said Sriram Iyer, Senior Research Analyst at Reliance Securities.
“Domestic silver prices are trading in the red on Tuesday early afternoon trade, tracking overseas prices. Technically, MCX Silver July holds support near Rs 71,100-70,500 levels. Resistance is at Rs 72,000-73,200 levels”, Iyer added.
The spot gold/silver ratio currently stands at 67.48 to 1 indicating that silver has outperformed gold.
MCX Bulldesk dipped 8 points or 0.05 percent, at 15,094 at 15:40. The index tracks the real-time performance of MCX Gold and MCX Silver futures.
In the futures market, silver for July delivery touched an intraday high of Rs 71,791 and a low of Rs 71,202 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 dropped Rs 559, or 0.78 percent to Rs 71,320 per kg at 15:42 hours with a business turnover of 10,993 lots. The same for the September contract slipped Rs 566, or 0.78 percent, to Rs 72,460 per kg with a turnover of 1,574 lots.
The value of July and September’s contracts traded so far is Rs 864.03 crore and Rs 93.33 crore, respectively.
Similarly, the Silver Mini contract for June edged lower Rs 515, or 0.72 percent at Rs 71,405 on a business turnover of 12,369 lots.
At 1014 (GMT), the precious metal was down 1.02 percent and was quoting at $27.75 an ounce in New York.
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