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Silver prices slip on weak gold, ETF outflow ahead of key Fed meeting

Moneycontrol logo Moneycontrol 14-06-2021 Sandeep Sinha
Silver prices slip on weak gold, ETF outflow ahead of key Fed meeting © Sandeep Sinha Silver prices slip on weak gold, ETF outflow ahead of key Fed meeting

Silver prices edged lower on June 14 tracking weakness in gold and ETF outflow ahead of the Federal Reserve policy meeting later this week. The precious metal had risen Rs 688 or 0.96 percent last week on the MCX.

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 52.46, which indicates neutral movement in the price.

The US CFTC data showed silver speculators raised their net longs by 1,856 contracts to 44,384 in the week to June 8.

Silver holdings in iShares ETF dropped by 11.53 tonnes to 17,900.44 tonnes. The fund NAV is trading at a discount of 0.83 percent.

The US dollar index marginally slipped to 90.44, down 0.09 percent against the major cross. The dollar index ended with a gain of 0.46 percent last week on safe-haven buying.

“Silver was not able to cross Rs 73,500 and gone back fourth time during last week, as we are hanging around the Rs 70,000-74,000 level again. Technically it made inside bar on the daily chart and in the short term we probably are going to see a lot of choppy behaviour in the silver, as we have to question whether or not we are going to be able to break out,” said Kshitij Purohit, Product Manager, Currency and Commodities, CapitalVia Global Research Limited.

The spot gold/silver ratio currently stands at 66.95 to 1 indicating that silver has outperformed gold.

MCX Bulldesk tumbled 122 points or 0.80 percent, at 15,096 at 15:22. The index tracks the real-time performance of MCX Gold and MCX Silver futures.

“International spot silver prices are trading modestly weaker on Monday afternoon trade, tracking weak gold. Technically, LBMA Silver is below $28.30 and will continue its bearish momentum up to $27.40-$26.70 levels. Resistance is at $28.10-$28.55 levels,” said Sriram Iyer, Senior Research Analyst at Reliance Securities.

“Domestic silver prices are trading weaker on Monday early afternoon trade, tracking overseas prices. Technically, MCX Silver July holds support near Rs 71,200-70,700 levels. Resistance is at 72200-73000 levels,” Iyer noted.

In the futures market, silver for July delivery touched an intraday high of Rs 72,000 and a low of Rs 71,464 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 declined Rs 557, or 0.77 percent to Rs 71,670 per kg at 15:27 hours with a business turnover of 11,118 lots. The same for the September contract fell Rs 535, or 0.73 percent, to Rs 72,836 per kg with a turnover of 1,145 lots.

The value of July and September’s contracts traded so far is Rs 1,034.94 crore and Rs 115.60 crore, respectively.

Similarly, the Silver Mini contract for June slumped Rs 560, or 0.77 percent at Rs 71,701 on a business turnover of 11,530 lots.

At 1000 (GMT), the precious metal was down 1.02 percent and was quoting at $27.85 an ounce in New York.

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