Silver prices fell below Rs 60,500 per kg on October 4 as participants build short positions as seen by the open interest. The precious metal had risen 0.99 percent last week on the COMEX.
The precious metal traded in the red in the afternoon trade after a gap-down start, tracking the weak global trend.
The white metal has been trading lower than the 20, 50, 100, and 200-day simple moving averages and exponential moving averages but higher than the 5-day simple and exponential moving average on the daily chart. The momentum indicator Relative Strength Index (RSI) was at 43.29, indicating a bearish trend in the price.
Silver saw a pullback rally last week after a recent selloff tracking recovery in gold and weakness in the US dollar.
Data from the CFTC showed that speculators raised net long positions in COMEX silver futures and options by 2,616 contracts to 3,518 in the week to September 28.
Investors will keep an eye on US August factory orders data to be released later in the day.
Sriram Iyer, Senior Research Analyst at Reliance Securities, said, “International prices have started flat and turn lower this afternoon in Asian trade as a weaker dollar offset bets that the US Federal Reserve could begin tapering its pandemic-era asset purchases soon.”
“Technically, if LBMA Silver continues above $22 level the markets could continue its upside momentum up to $23.60-$24.00 levels. Support is at $21.75-$21.00 levels. Technically, if MCX Silver December trades above Rs 60,000 levels the markets could continue its bullish momentum up to Rs 61,300-62,500 levels whereas support is at Rs 59,700-55,900 levels,” Iyer added.
Kshitij Purohit, Product Manager, Currency & Commodities, CapitalVia Global Research Limited, said, “MCX Silver has moved downside, formed a descending symmetric triangle pattern. The key resistance would be around Rs 61,150 whereas support level holds near Rs 58,175 – low of the last week. Traders should look forward to selling opportunity in MCX Silver future around the resistance line of pattern – around the level of Rs 61,100 with a target of Rs 59,775 and a stop loss at Rs 61,600,” he noted.
Silver holdings in iShares ETF were unchanged at 17,089.46 tonnes. The fund NAV is trading at a premium of 1.82 percent.
The US dollar index was down by 0.10 percent at 93.95 against the major currencies in the afternoon session.
The spot gold-silver ratio was at 78.12 to 1, indicating that silver had outperformed gold.
MCX Bulldesk dropped 13 points, or 0.17 percent, to 13,800 at 3.32 pm. The index tracks the real-time performance of MCX Gold and MCX Silver futures.
On MCX, December silver delivery touched an intraday high of Rs 60,923 and a low of Rs 60,235 a kg. In the current series, the metal has touched a low of Rs 58,150 and a high of Rs 74,127.
Silver delivery for the December contract slipped Rs 146, or 0.24 percent, to Rs 60,404 per kg at 3.36 pm with a business turnover of 12,042 lots. The same for March declined Rs 147, or 0.24percent, to Rs 60,880 with a turnover of 954 lots.
The value of December and March contracts traded so far is Rs 579.84 crore and Rs 19.80 crore, respectively.
The Silver Mini contract for November eased by Rs 112, or 0.18 percent, to Rs 60,660 on a business turnover of 28,360 lots.
At 10:08 (GMT), silver was 0.55 percent lower and was quoting at $22.40 an ounce in New York.
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