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Silver prices jump above Rs 70,000 per kg on weak dollar; traders increase net long position –

Source: Reuters

Silver prices climbed for the fourth successive day on July 5 on dollar weakness and firm gold and industrial metal prices. The precious metal had risen Rs 2,407 or 3.55 percent last week on the MCX.

The white metal traded in the positive territory after a gap-up start tracking the firm global trend.

The semi-precious metal has been trading higher than 5, 20, 100 and 200 days’ moving averages but lower than the 50-day moving averages on the daily chart. The momentum indicator Relative Strength Index (RSI) is at 55.16, which indicates upbeat movement in the price.

US consumer confidence jumped to its highest level in nearly one-and-a-half years in June, while initial claims for state unemployment benefits dropped 51,000 to a seasonally adjusted 364,000 for the week ended June 26.

According to CFTC data, speculators raised net long positions by 3,260 contracts to 33,142 in the week to June 29.

The United States is observing the July 4 Independence Day holiday on Monday, so markets are shut and trading volume will be thin during the day.

The highlight this week will be the Federal Reserve’s policy committee minutes from its June meeting.

G20 finance ministers and central bank governors will also convene in Venice starting Friday for a summit.

Meanwhile, the economic calendar is thin this week with only ISM Non-Manufacturing PMI for the month of June and jobless claims for the week ending June 28 from the US side of things.

Silver holdings in iShares ETF fell by 7.52 tonnes to 17,353.61 tonnes. The fund NAV is trading at a premium of 1.15 percent.

The US dollar index eased to 92.14, down 0.28 percent against the major cross.

“International spot silver prices have started flat to marginally higher this morning and early afternoon in Asian trade. LBMA Silver has bounced back from 200-Daily Moving Average which is placed at $25.70 level above which it will continue its Bullish momentum and further could see $26.55-$27.40 levels. Support is at $25.80-$24.60 levels,” said Sriram Iyer, Senior Research Analyst at Reliance Securities.

“Domestic silver prices are trading marginally higher this afternoon, tracking overseas prices. Technically, MCX Silver September above 68,700 levels will continue its bullish momentum up to Rs 70,300-71,400 levels. Support is at Rs 68,600-67,300 levels,” he added.

The spot gold/silver ratio currently stands at 67.43 to 1 indicating that silver has outperformed gold.

MCX Bulldesk increased 33 points or 0.23 percent, at 14,698 at 15:16. 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 70,589 and a low of Rs 70,589 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 rose Rs 231, or 0.33 percent to Rs 70,419 per kg at 15:18 hours with a business turnover of 9,198 lots. The same for the December contract gained Rs 157, or 0.22 percent, to Rs 71,739 per kg with a turnover of 230 lots.

The value of September and December’s contracts traded so far is Rs 490.77 crore and Rs 7.74 crore, respectively.

Similarly, the Silver Mini contract for August advanced Rs 221, or 0.31 percent at Rs 70,450 on a business turnover of 11,646 lots.

Kshitij Purohit, Product Manager, Currency & Commodities, CapitalVia Global Research Limited said, “MCX Silver has been trading with positive bias since morning and price is sustaining above the support of 15-SMA of hourly chart placed at Rs 69,874. The key resistance holds near Rs 70,860.”

At 0944 (GMT), the precious metal was up 0.80 percent and quoting at $26.71 an ounce in New York.

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