Silver price rises above Rs 70,500/kg as dollar retreat; trading above major averages


Silver prices edged higher on July 6 tracking firm industrial metals and gold as the dollar retreat from April highs. The precious metal had declined 0.31 percent yesterday on the MCX.

The white metal extended gains to trade at day’s high after a gap-up start tracking the firm global cues.

The semi-precious metal has been trading higher than 5, 20, 50, 100 and 200 days’ simple moving averages and exponential moving averages on the daily chart. The momentum indicator Relative Strength Index (RSI) is at 56.57, which indicates bullish movement in the price.

Silver may witness choppy trade as both gold and industrial metal may struggle to build on current gains and uncertainty about Fed’s monetary policy and China’s demand. We do not expect a sustained rise in silver unless investor interest picks up significantly, said Kotak Securities.

Also weighing on the price are concerns about the Chinese economy, slower activity in the manufacturing sector globally due to surging raw material prices and weaker investor interest as is apparent from ETF outflows.

Market players await US Federal Reserve latest policy meeting minutes to be released tomorrow for cues on the central bank’s monetary stance in the coming months.

Silver holdings in iShares ETF were unchanged at 17,353.61 tonnes as the US market was shut yesterday on account of the Independence Day holiday. The fund NAV is trading at a premium of 1.15 percent.

The US dollar index marginally fell to 92.40, down 0.01 percent against the major cross.

“In other precious metals, international silver prices are trading higher on Tuesday early afternoon trade in Asia supported by a weaker dollar and stronger gold. Technically, LBMA Silver holds a 200-Daily Moving Average at $ 26.40 level above which could continue to push prices up to $ 26.75-$ 27.40 levels. Support is at $ 26.30-$ 25.70 levels,” said Sriram Iyer, Senior Research Analyst at Reliance Securities.

“Domestic silver prices are also trading with gains, tracking overseas prices. Technically, MCX Silver September holds a 50-DMA near 70480 levels above which could see a bullish momentum up to 71200-72100 levels.” “Iyer advised his clients to buy on dips for the rest of the session near Rs 70,000 with a stop loss of Rs 69,000 and for a target of Rs 72,000.”

The spot gold/silver ratio currently stands at 67.80 to 1 indicating that gold has outperformed silver.

MCX Bulldesk advanced 160 points or 1.09 percent, at 14,816 at 15:15. The index tracks the real-time performance of MCX Gold and MCX Silver futures.

In the futures market, silver for September delivery touched an intraday high of Rs 70,766 and a low of Rs 70,200 per kg on the MCX. So far in the current series, the precious metal has touched a low of Rs 67,700 and a high of Rs 75,215.

Silver delivery for the September contract gained Rs 716, or 1.02 percent to Rs 70,755 per kg at 15:16 hours with a business turnover of 8,982 lots. The same for the December contract soared Rs 661, or 0.93 percent, to Rs 72,055 per kg with a turnover of 189 lots.

The value of September and December’s contracts traded so far is Rs 811.81 crore and Rs 12.70 crore, respectively.

Similarly, the Silver Mini contract for August rose Rs 656, or 0.94 percent at Rs 70,764 on a business turnover of 11,362 lots.

Kshitij Purohit, Product Manager, Currency & Commodities, CapitalVia Global Research Limited said, “MCX Silver has been trading with positive momentum and price has formed ascending wedge pattern on intraday chart and trailing around resistance line in last past few sessions. The key support is at Rs 70,065.”

At 0951 (GMT), the precious metal climbed 1.06 percent and quoting at $ 26.78 an ounce in New York.

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