Silver futures fall 1.1% to Rs 66,560 a kg on firm dollar, resistance seen at Rs 66,900 –

Silver prices plummet to Rs 66,560 per kg on January 22 as participants increased their short positions as seen by the open interest. The precious metal had risen 0.3 percent on the Comex the previous day.

The white metal traded in negative territory after opening gap down, tracking weakness in gold, higher treasury yields and a firm US dollar.

The financial hub of Shanghai reported its first locally transmitted COVID case in two months on January 21 as the Chinese government urged people not to travel during the upcoming Lunar New Year Holiday.

The dollar index was trading higher at 90.17 levels, up 0.05 percent in the afternoon.

Silver holdings in iShares ETF remained unchanged at 17,862.7 tonnes, as ETF investors moved to the sidelines after the recent inflow.

MCX iCOMDEX Bullion Index, which tracks the real-time performance of MCX gold and silver futures, eased 74.44 points, or down 0.48 percent, at 15,379.13 at 1505 hours.

Sriram Iyer, Senior Research Analyst at Reliance Securities said, “International and domestic silver prices are trading down this Friday morning and early afternoon trade. Technically, LBMA silver Spot is holding a resistance near 21-daily moving average at $25.97 levels and below which could see downside $24.90-$24.00 levels whereas resistance is at $25.80-$26.30 levels.”

Technically, MCX March silver is trading below Rs 67,000 levels, indicating a downside pressure up to Rs 65,500-64,700. Resistance is at 66900-67500 levels, he said.

In the futures market, silver for March delivery touched an intraday high of Rs 67,000 and a low of Rs 66,373 a kg on the MCX. So far, in the current series, the precious metal has touched a low of Rs 54,386 and a high of Rs 79,980.

Silver delivery for March contract fell Rs 740, or 1.10 percent, to Rs 66,560 a kg at 1508 hours with a business turnover of 12,029 lots. The same for the May contract tanked Rs 532, or 0.78 percent, to Rs 67,630 per kg with a turnover of 1,358 lots.

The value of March and May contracts traded, so far, is Rs 900.79 crore and Rs 5.27 crore, respectively.

The spot gold/silver ratio stands at 73.02 to 1, indicating that gold has outperformed silver.

Anuj Gupta- DVP- Commodities and Currencies Research, Angel Broking Ltd, said, “As of now, traders can go for buy in silver at Rs 67,000 levels, with the stop loss of Rs 66400 levels for the target of Rs 68,500 levels.

The focus during the day will be on the US and European economic data and development relating to a virus outbreak and vaccine progress, US-China tensions and US stimulus proposal. These factors may affect the dollar as well as the general risk sentiment and thereby, trend in gold and silver price, said Kotak Securities.

At 0943 GMT, the precious metal was down 1.31 percent quoting at $25.51 an ounce in New York.

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