Silver prices fall on rupee weakness; gold remains subdued ahead of Fed meet


Silver prices were moderately lower on July 27, tracking rupee depreciation, firm dollar and subdued trend in gold despite bearish global trend. The precious metal had gained 0.3 percent yesterday on the COMEX.

The white metal traded marginally in the red after a gap-down start in the afternoon session.

The semi-precious metal has been trading lower than 5, 20, 50, 100 and 200 days’ moving averages on the daily chart. The momentum indicator Relative Strength Index (RSI) is at 39.19, which indicates bearishness in the price.

Silver benefitted from sharp gains in industrial metals amid supply concerns relating to China.

The Federal Open Market Committee may not make policy changes for July, but more details could likely emerge on the tapering discussions that started in June.

The Fed aside, investors will also get a first look at 2nd quarter US GDP which is expected to show the peak of post-pandemic recovery.

Silver holdings in iShares ETF were unchanged for the second day at 17,275.76 tonnes. The fund NAV is trading at a discount of 0.67 percent.

The US dollar index rose to 92.75, up 0.11 percent against the major cross.

Sriram Iyer, Senior Research Analyst at Reliance Securities said, “International spot silver prices have started flat this morning and turn negative in early afternoon Asian trade. Technically, LBMA Silver could trade within the range of $ 24.70-$ 25.50 levels.”

“On the domestic front, MCX Silver September holds resistance near Rs 67,300-68,000 levels. Support is at Rs 66,700-65,900 levels,” he added.

Kshitij Purohit, Product Manager, Currency & Commodities, CapitalVia Global Research Limited said, “MCX Silver future is trading with moderately bearish trend along with the resistance of 15-SMA of hourly chart placed at Rs 67,130. The key support is at Rs 66,690.”

The spot gold/silver ratio currently stands at 71.48 to 1 indicating that gold has outperformed silver.

MCX Bulldesk modestly declined 1 point, or 0.01 percent, to 14,511 at 15:34. 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 67,357 and a low of Rs 66,881 per kg on the MCX. So far in the current series, the precious metal has touched a low of Rs 66,286 and a high of Rs 75,215.

Silver delivery for the September contract eased Rs 121, or 0.18 percent to Rs 67,000 per kg at 15:35 hours with a business turnover of 12,007 lots. The same for the December contract slide Rs 79, or 0.12 percent, to Rs 68,134 per kg with a turnover of 1,154 lots.

The value of September and December’s contracts traded so far is Rs 662.26 crore and Rs 65.55 crore, respectively.

Similarly, the Silver Mini contract for August fell Rs 160, or 0.24 percent at Rs 67,205 on a business turnover of 21,695 lots.

Silver may witness choppy trade unless there is a clear direction in gold; however, demand concerns may keep pressure on price, said Kotak Securities.

At 1008 (GMT), the precious metal slipped 0.51 percent and was quoting at $ 25.18 an ounce in New York.

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