News with Tags "silver"

Silver was at its weakest in over two years on Monday, as it tumbled 7 percent to USD 20.69 an ounce. According to Sunil Kashyap, MD of Scotia Mocat silver is driven right now by gold. Therefore it is reflecting the weakness seen in the yellow metal.

He believes USD 20-20.50 is a good support for the silver in the short-term.

Also read: Gold falls for eighth session, silver down sharply

Below is the verbatim transcript of his interview to CNBC-TV18

Q: What has led to the weakness that we have seen in silver prices currently?

A: I think we have seen a huge fall in the price on Monday morning. There were some very large orders that came through the market specifically on Monday at the open. Close to 15 minutes after the open, we saw a lot of selling and that certainly moved the silver prices down by USD 2 per ounce.

It was a trend that we have seen over the last few weeks. There has been selling of silver largely driven because people have been offloading positions in gold and that seen silver selling also take place.

Q: What is the next best approach then, how would you advise retail investors to look at silver given the high volatility that we have seen offlate?

A: Silver is very difficult metal in terms of retail investors. They need to be very careful, which is why it is a highly volatile and risky metal. It moves up and down very fast. We would say that as far as silver is concerned, if the investors are buying physical metal to hold, it is not a bad purchase especially in rupee terms.

However, if a small investor is looking for a secure store of value, he is much better off being in gold rather than silver.

Q: Where exactly do you expect silver to stabilise on a medium-term on a three months basis as well as on a possible six months basis?

A: Silver is driven right now by gold so one has to look at what happens to gold. Generally, silver is an industrial metal so the underlying trends for supply and demand had already shown weakness. The demand from the solar panel industry which uses silver has been declining dramatically. Therefore we expect some amount of sell-off.

I think at these levels there is quite a good physical demand for the metal which is underpinning the price right now. I would say that around USD 20-20.50 is a good support for the silver price in the short-term.

In the wake of falling global prices of precious metals , the government today further slashed the import tariff value of gold to USD 440 per ten grams, while it has been kept unchanged at USD 761 per kg for silver imports.

Tariff value is the base price on which the customs duty is determined to prevent under-invoicing.  Till last week, the tariff value of gold was at USD 466
per ten grams and silver at USD 761 per kg.

The notification in this regard was issued by the Central Board of Excise and Customs (CBEC), an official release said. However, the import tariff value of different varieties of vegetable oils, brass scrap and poppy seed has been kept
unchanged.

Government has reduced the import tariff value of gold keeping in view the weak global prices of precious metals. In Singapore market, gold and silver prices are ruling down at below Rs 1,385 per ounce and USD 23 per ounce, respectively.

Similarly, gold in the national capital is costing around Rs 27,000 per ten grams and silver at Rs 44,200 per one kg.

India, the world's largest gold consumers, is estimated to have imported 215 tonnes of yellow metal in January-March period of this year. The demand for gold is expected to be robust in the coming months, as per the World Gold Council.

Indian gold futures edged higher from their lowest level in a month, helped by global leads and a weaker rupee at home, while banks, the primary dealers of bullion, awaited policy direction after the government restricted imports on a consignment basis.

At 2 pm, the actively traded gold for June delivery on the Multi Commodity Exchange (MCX) was 0.57 percent higher at 26,238 rupees per 10 grams, after hitting a low of 25,373 rupees in the previous session, a level last seen on April 18.

India, the world's biggest buyer of the metal, banned gold imports on a consignment basis except for jewellery exporters and in January raised the import duty on gold by 50 percent to 6 percent.

"We have no clue how to import," said a dealer with a private bullion importing bank in Mumbai.

India's gold and silver imports jumped 138 percent in value terms in April as traders stocked up ahead of the Akshaya Tritiya festival in May, which is an occasion to buy gold.

"There is no action in the market. Everybody has stopped consignment imports... Premiums are still on the higher side in the domestic market," said another dealer with a private bank in Mumbai, adding, premiums charged by wholesalers were at $15-20 an ounce.

Silver also edged higher from its lowest level in more than two years.

Silver for July delivery on the MCX rose 0.33 percent to 43,404 rupees per kilogram, after hitting a low of 40,749 rupees in the previous session, the lowest since early January 2011.

(USD 1 = 55.1050 rupees)

In an interview to CNBC-TV18, Priti Gupta, Director at Anand Rathi Commodities shared outlook on various commodities and how one should play them now.

Below is a verbatim transcript of the interview:

Q: Give us a word on silver and how traders are approaching that, do you see far more downside on that commodity?

A: Looking forward, there is not much that is supporting the precious metal prices . Silver, like we have always seen, is more volatile than gold therefore any movement in silver prices is always magnified.

Going forward, again with equity markets world over are performing well. As well as people are waiting and watching as to what happens at the Federal Open Market Committee (FOMC) meeting on May 22 because with the inflation figures coming out, it is still a question mark whether they will continue their asset purchase programme in the US or not. In case, there is any hawkishness about that, we will see the prices falling down even further.

Q: Are you surprised that crude keeps bouncing back to this USD 105 per barrel level because people have been predicting massive downsides there but it has still not come about?

A: I truly believe that there is nothing that supports the crude price fundamentally. However, these little geopolitical tensions in Syria and Lebanon will always give that little bit of a streak of prices running up. However, even if you look across the board, even if you look at the international energy agency figures coming out, they have all predicted slower demand in crude and energy for the coming year for 2013.

So, I still maintain that the Nymex crude will be anywhere in the range of USD 92-94 per barrel and not above that.

After trading lower through most of the day, gold suddenly lurched more than USD 10 an ounce higher around noon US time, with traders citing a wave of pent-up short-covering after seven consecutive days of losses. Also, COMEX silver futures had plunged more than 9 percent after a big sell order at the open, triggering technical buy signals, they said.

The spot price of gold, which early in the day threatened to test a 1-1/2-year low touched last month, was up USD 36 an ounce or 2.6 percent by 2010 GMT, snapping a seven-session losing streak.

Also read: Gold, silver fall as dollar gains; ETF holdings drop

Silver's most-active contract on COMEX, July, rose 2.3 percent to USD 22.86 an ounce in post-settlement trade, after closing the official session 1 percent higher at USD 22.582. That marked a sharp reversal for a market that just hours earlier fell to a September 2010 low of USD 20.25.

The whipsaw session jolted traders and may signal new support for battered precious metals markets.

"A whole load of short-covering came in this morning as people got unnerved looking at the way some of the precious charts had tanked," said Adrian Day at Adrian Day Asset Management in Annapolis, Maryland.

"I'm a buyer at these levels," said Day, whose firm manages about USD 200 million in commodities, about a third of that in gold holdings.

Notwithstanding the rebound on the day, gold is down 17 percent for this year while silver has lost 25 percent as money rotated out of precious metals into equities and the US dollar amid an improving outlook for the US and global economies.

Hedge funds and other major speculators in commodities pulled USD 1.4 billion from the US gold futures market in the week to May 14, Reuters calculations of data released by the Commodity Futures Trading Commission showed.

The case for buying gold as an inflation hedge has also been weakened by speculation lately that the Federal Reserve may end sooner rather than later its ultra-low interest rates and bond-buying programs to stimulate the US economy.

The market will now focus on congressional testimony on the US economy by Federal Reserve Chairman Ben Bernanke and minutes of the US central bank's April meeting, due later in the week.

Gold-backed exchange-traded funds have, in particular, seen massive outflows in recent months, although silver holdings have held up relatively better.

Holdings in SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, hit their lowest in four years on Friday, declining 3 tonnes to 1,038.41 tonnes.

"The next leg for gold is still lower, and USD 1,200 is our target in the next few weeks," BofA Merrill Lynch analyst Michael Widmer said.

AWAITING SILVER'S NEXT MOVE LOWER

Analysts had said it was only a matter of time before silver would give way, citing flagging industrial demand.

"I'm waiting for the next big wave down in silver that would take the market into the teens," Frank McGhee, chief precious metals trader at Chicago's Integrated Brokerage Services, said, referring to silver futures breaking below $20 an ounce.

Holdings of the largest silver ETF, the iShares Silver Trust, fell 187.7 tonnes last week to 10,253 tonnes, hitting their lowest level since mid-January.

In Monday's session, more than 3,000 lots of silver were sold in just 20 minutes of early Asian trading, Reuters data showed.

Yuichi Ikemizu, a branch manager for Standard Bank in Tokyo, said an unidentified investor sold off a big chunk of silver holdings on Monday morning.

The gold-silver ratio is at its highest level since September 2010, with an ounce of gold currently buying 63 ounces of silver. That is twice as much as in April 2011, when silver was trading considerably higher.

"The latest move lower has been to some extent technical, but silver was the underperformer among precious metals during the mid-April fall," Citigroup metals strategist David Wilson said.

"The metal had found some support from steady ETFs investment, but this has now started to come lower, showing that the retail sector is also becoming more bearish as well as professional investors."

In other precious metals, platinum was up 2.6 percent at above USD 1,487 an ounce, recovering from a three-week low of around USD 1,426 earlier in the session. Palladium rose 1.4 percent to above USD 746 an ounce from a lower start at USD 736.97.

Gold drifted lower for an eighth session out of nine on Tuesday on outflows from exchange-traded funds and as the dollar firmed, putting more pressure on bullion which has already lost nearly a fifth of its value this year.

Also Read: Steps to curb gold imports if needed: P Chidambaram

Silver also dropped, after recovering from Monday's early dive when it hit 2-1/2-year lows.

FUNDAMENTALS

* Spot gold had fallen 0.4 percent to USD 1,387.86 an ounce by 0042 GMT. The price rose 2.6 percent on Monday after a seven-session slide -- the metal's longest losing streak since March 2009.

* US gold futures gained 0.2 percent to USD 1,386.60.

* Growing fears the US Federal Reserve could soon halt its bond-buying programme has also trimmed gold's appeal as an inflation hedge.

* Charles Evans, president of the Federal Reserve Bank of Chicago, said the Fed could continue on its bond-buying programme through the summer, but end it abruptly in the autumn if by then it is confident that the improvement in the jobs outlook is here to stay.

* Spot silver fell 1.1 percent to USD 22.67, not far off Monday's low of USD 20.84. Spot silver closed up 3 percent overnight after falling as much as 6 percent.

* US silver futures were up 0.3 percent at USD 22.65 an ounce after sliding by up to 9 percent during the early sell-off in Asia on Monday.

* SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, said its holdings stood at 1,031.50 tonnes on Monday, the lowest in more than four years.

* Holdings of the largest silver ETF, the iShares Silver Trust are at the lowest since mid-January.

* India, the world's top gold consumer, will take more steps if necessary to curb gold imports after the country's overseas purchases of gold and silver shot up 138 percent in April.

MARKET NEWS

* The dollar gained versus a basket of currencies after retreating broadly on Monday as traders pared back expectations Fed Chairman Ben Bernanke would hint at tapering US bond purchases this week.