Silver turns positive for 2021 after sharp selloff on firm global cues

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Silver prices on June 18 climbed and turned positive for the year after a sharp selloff the previous day in broader assets class, tracking recovery in gold. The precious metal trade at day’s high after a gap-up start on firm global cues as the dollar index took a breather.

The semi-precious metal has been trading lower than 5, 20, 50 and 100 days’ moving averages but higher than the 200-day moving average on the daily chart. The momentum indicator Relative Strength Index (RSI) is at 39.05, which indicates a bearish movement in the price.

Silver holdings in iShares ETF declined by 103.8 tonnes to 17,842.76 tonnes. The fund NAV is trading at a discount of 2.48 percent.

The Fed’s monetary policy tightening, as well as worries about China crackdown on rising raw material prices, weighed on silver.

The US dollar index modestly fell to 91.86, down 0.01 percent against the major cross.

“In other precious metals, international silver prices are trading with small gains on Friday early afternoon trade in Asia tracking gold. Technically, LBMA Silver below $26.50 will continue its bearish momentum and could see further downside movement up to $25.80-$24.10 levels. Resistance is at $26.65-$26.90 levels,” said Sriram Iyer, Senior Research Analyst at Reliance Securities.

“Domestic silver prices are trading with small gains on Friday early afternoon trade, tracking overseas prices. Technically, MCX Silver July holds support near 67300-66500 levels. Resistance is at 68700-69500 levels,” Iyer added.

The spot gold/silver ratio currently stands at 67.88 to 1 indicating that gold has outperformed silver.

MCX Bulldesk soared 100 points or 0.69 percent, at 14,593 at 16:21. The index tracks the real-time performance of MCX Gold and MCX Silver futures.

In the futures market, silver for July delivery touched an intraday high of Rs 68,740 and a low of Rs 68,081 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 jumped Rs 1,011, or 1.50 percent to Rs 68,610 per kg at 16:23 hours with a business turnover of 10,691 lots. The same for the September contract rose by Rs 1,018, or 1.48 percent, to Rs 69,644 per kg with a turnover of 4,256 lots.

The value of July and September’s contracts traded so far is Rs 1,131.44 crore and Rs 176.47 crore, respectively.

Similarly, the Silver Mini contract for June gained Rs 877, or 1.29 percent at Rs 68,735 on a business turnover of 15,712 lots.

At 1055 (GMT), the precious metal climbed 2.48 percent and was quoting at $26.49 an ounce in New York.

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