Silver drops 0.59% for the week on strong rupee, ETF outflow; resistance seen at Rs 72,700-74,300 levels



Silver prices marginally declined 0.59 percent this week to settle at Rs 71,080 per kg on firm rupee, ETF outflows amid volatile trade. The precious metal was pressured by weakness in gold and a stronger dollar.

It ended the week with a loss of Rs 420 on the domestic bourse. Silver prices rose in three out of the five trading sessions on the MCX.

The semi-precious metal has been trading higher than 20, 50, 100 and 200 days’ simple moving averages but lower than the 5-day moving average on the daily chart. The momentum indicator Relative Strength Index (RSI) is at 59.01 which indicates strong movement in prices.

Silver holdings in iShares ETF fell 28.86 tonnes to 17,598.97 tonnes in the week. The fund NAV is trading at a premium of 0.71 percent.

The US dollar index depreciates 0.49 percent to close at 90.28 against the major cross. The dollar index ended with a gain of 0.07 percent through the week.

Kshitij Purohit, Product Manager, Currency & Commodities, CapitalVia Global Research Limited said, “Silver tried to cross the Rs 72,400 level but failed to cross and came to touch lower trading range, this is an area that has been important that market is getting enough momentum.” 

“The dollar index is near Aug 2020 low is going to support in next week. Silver has not got enough value like base metal even though industrial demand is high. I think silver will outperform in the coming time,” he said.

The spot gold/silver ratio currently stands at 67.24 to 1 indicating that silver has outperformed gold. 

Silver delivery for the May contract surged by Rs 607, or 0.86 percent to settle at Rs 71,080 per kg with a business turnover of 9,680 lots. The same for the July contract climbed by Rs 610, or 0.85 percent, to Rs 72,212 per kg with a turnover of 291 lots.

The value of May and July’s contracts traded on Friday was Rs 3,413.80 crore and Rs 87.33 crore, respectively.

Similarly, the Silver Mini contract for June edged higher by Rs 573, or 0.81 percent at Rs 71,100 on a business turnover of 11,948 lots.

The white metal settled with a gain of 1.67 percent at $ 27.51 an ounce in New York.


Sriram Iyer, Senior Research Analyst at Reliance Securities said, “If LBMA Silver trades above $ 26.70 level, we could see a positive momentum up to $ 27.80-$ 29.70 levels. Support is at $ 26.80-$ 25.98 levels.”

MCX Silver July holds support near Rs 69,400-67,000 and Resistance is at Rs 72,700-74,300 levels in the coming week, Iyer added.


Reliance Securities advises its clients to buy Silver July futures near Rs 69,900-70,000 with a stop loss at Rs 68,900 and a target at Rs 72,500.

Purohit said, “Traders should look forward to a buy-on-dips opportunity for MCX Silver future. The ideal buying range likely to be between Rs 70,800-70,700, keeping a target of Rs 73,500 and maintain a stop loss at Rs 69,800″.

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