Silver price eases as US Dollar rebound, expert advises sell for target of Rs 69,000



Silver prices trade lower at Rs 70,743 per kg tracking rebound in the US dollar and weakness in gold. The precious metal traded in the red after a gap-down start in the afternoon session.

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 48.67, which indicates subdued movement in the price.

The white metal prices corrected sharply from recent highs on concerns about Chinese demand and US economic optimism pushed the US dollar higher.

Silver holdings in iShares ETF jumped by 60.6 tonnes to 17,989.86 tonnes. The fund NAV is trading at a discount of 1.09 percent.

The US dollar index climbed to 90.53, up 0.03 percent against the major cross.

The spot gold/silver ratio currently stands at 68.30 to 1 indicating that gold has outperformed silver.

MCX Bulldesk slightly gained 4 points or 0.03 percent, at 15,070 at 15:40. The index tracks the real-time performance of MCX Gold and MCX Silver futures.

Sriram Iyer, Senior Research at Reliance Securities said, “LBMA Silver is trading below 21-Daily Moving Average which is placed at $ 27.70 levels indicating for sideways to marginal downside momentum up to $ 27.14-$ 26.77 levels. Resistance is at $ 27.88-$ 28.30 levels.”

“MCX Silver July holds a support near Rs 69,900-69,000 levels while resistance is at Rs 71,200-72,500 levels.” “Iyer advised his clients to sell July Silver at Rs 71,000 with a stop loss at Rs 72,000 and a target of Rs 69,000,” Iyer said.

In the futures market, silver for July delivery touched an intraday high of Rs 70,842 and a low of Rs 70,329 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 eased Rs 50, or 0.07 percent to Rs 70,760 per kg at 15:44 hours with a business turnover of 12,478 lots. The same for the September contract dropped Rs 37, or 0.05 percent, to Rs 71,950 per kg with a turnover of 840 lots.

The value of July and September’s contracts traded so far is Rs 986.27 crore and Rs 23.04 crore, respectively.

Similarly, the Silver Mini contract for June modestly rose by Rs 4, or 0.01 percent at Rs 70,868 on a business turnover of 15,527 lots.

The trend in US dollar, bond yields and equity market may continue to affect gold and silver and focus will be on economic data from major economies, central bank comments and development relating to virus situation, US stimulus plan, US-China relations and China’s crackdown on commodities, said Kotak Securities.

At 1018 (GMT), the precious metal was marginally up 0.05 percent quoting at $ 27.49 an ounce in New York.

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