Silver
Silver prices edged higher to settle at Rs 65,040 per kg on April 1 as participants increased their long positions as seen by the open interest. The precious metal rose tracking gains in gold and industrial metal to end at day’s high.
It ended the week with a gain of Rs 284 or 0.44 percent on the domestic bourse. Silver prices jumped in two out of the four trading sessions on the MCX in a truncated week.
The semi-precious metal has been trading higher than 5 and 200 days’ moving averages but lower than the 20, 50, 100 days’ moving average on the daily chart. The Relative Strength Index (RSI) is at 44.60 which indicates weak momentum in prices.
The hybrid metal witnessed some volatility in the recent past. Silver prices did witness some selling amidst an outflow in ETFs and worries over demand for industrial metals as European leaders hinted at lockdown measures. On the other hand, the gold/silver ratio saw a fall from highs of 127 to currently trading near 65, hence supporting the overall sentiment, said Motilal Oswal.
Silver holdings in iShares ETF were unchanged at 17,888.36 tonnes. The fund NAV is trading at a premium of 2.53 percent.
The US dollar index ended modestly higher at 93.04, up 0.10 percent on April 1 against the major cross. The dollar index hit a 2021 high of 93.47 earlier this week and soared 0.29 percent in the week.
The spot gold/silver ratio currently stands at 69.26 to 1 indicating that silver has outperformed gold.
MCX Bulldesk soared 164 points or 1.17 percent to close at 14,160. The index tracks the real-time performance of MCX Gold and MCX Silver futures.
“Although the US dollar is losing ground against a large basket of currencies, silver is checking the resistance level at $ 25. The US Dollar Index has moved through the 93.20 support level and is now heading towards the next support level at 93. Because the Dollar Index falls below the 93 level of support, it will gain more downside traction, which will be bullish for silver and gold prices today,” said Kshitij Purohit, Product Manager, Currency & Commodities, CapitalVia Global Research Limited.
“The gold/silver ratio is currently trying to settle below the 70 levels. If this attempt is successful, gold/silver ratio will move towards the 69 level which will be bullish for silver,” he said.
In the futures market, silver for May delivery touched an intraday high of Rs 65,155 and a low of Rs 63,512 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 rose Rs 1,226, or 1.92 percent to settle at Rs 65,040 per kg with a business turnover of 10,112 lots. The same for the July contract gained Rs 1,259, or 1.95 percent, to Rs 65,970 per kg with a turnover of 898 lots.
The value of May and July’s contracts traded on April 1 was Rs 2,798.30 crore and Rs 67.68 crore, respectively.
Similarly, the Silver Mini contract for April climbed Rs 1,106, or 1.73 percent at Rs 65,140 on a business turnover of 51,305 lots.
The precious metal settled with a gain of 2.03 percent quoting at $ 25.03 an ounce in New York.
Strategy for Next Week
“For the upcoming week, traders should keep an eye on Buy-on-dips opportunity in MCX Silver May future from the level at Rs 63,700. For such position, one should keep target around Rs 66,200 and stop loss at Rs 62,810”, noted Purohit.
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