Silver prices slide as gold and industrial metals struggle for direction, US dollar rebound



Silver prices traded in the negative on Friday afternoon session on dollar rebound as US GDP data showed that recovery was back on track in the world’s largest economy and softness in gold. The continued appreciation in rupee also put added pressure on the white metal price.

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 52.16, which indicates sideways movement in the price.

The white metal prices have turned choppy as gold struggles to sustain above $ 1,900/oz level on the back of stability in the dollar and equity market. Chinese crackdown on rising raw material prices also weighed on the price.

Silver holdings in iShares ETF were unchanged for the third day at 17,936.56 tonnes. The fund NAV is trading at a premium of 0.74 percent.

The US dollar index jumped above 90 marks to trade at 90.11, up 0.175 against rival currencies; whereas US 10-year Treasury yields were trading at 1.61 percent.

The spot gold/silver ratio currently stands at 68.37 to 1 indicating that silver has outperformed gold.

MCX Bulldesk tumbled 89 points or 0.54 percent, at 15,162 at 15:28. The index tracks the real-time performance of MCX Gold and MCX Silver futures.

Sriram Iyer, Senior Research at Reliance Securities said, “Technically, LBMA Silver is sustaining below $ 28.30 level below which could see sideways to downside momentum up to $ 27.25-$ 26.80 levels. However, a strong breakout could take prices up to $ 28.66-$ 29.20 levels.”

“Technically, MCX Silver July if sustains below Rs 71,300 levels can take prices up to Rs 70,500-69,200 levels. Resistance is at Rs 71,800-72,300 levels”, Iyer said.

In the futures market, silver for July delivery touched an intraday high of Rs 71,476 and a low of Rs 70,967 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 542, or 0.76 percent to Rs 71,177 per kg at 15:31 hours with a business turnover of 11,420 lots. The same for the September contract plunged Rs 534, or 0.73 percent, to Rs 72,314 per kg with a turnover of 424 lots.

The value of July and September’s contracts traded so far is Rs 1,039.90 crore and Rs 12.80 crore, respectively.

Similarly, the Silver Mini contract for June declined by Rs 505, or 0.70 percent at Rs 71,235 on a business turnover of 15,614 lots.

Silver may witness choppy trade as gold and industrial metals struggle for direction however some profit-taking is likely if the US dollar recovers further, said Kotak Securities.

At 1005 (GMT), the precious metal was down 0.59 percent quoting at $ 27.77 an ounce in New York.

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