Silver prices declined to Rs 63,050 per kg on December 7 as participants increased their short positions as seen by the open interest. Last week, spot silver prices gained over 6.4 percent to close at $24.2 per ounce in line with the international gold prices. Meanwhile, silver prices on the MCX surged about 6 percent last week to end at Rs.62471 per kg.
The white metal fell tracking weakness in the gold price and strength in the US dollar.
The US dollar index trades higher at 91.05 levels, up 0.40 percent after weakening 1.27 percent last week.
Silver holdings in iShares ETF remained unchanged at 17,052.76 tonnes.
MCX iCOMDEX Bullion Index rose 31.82 points, or 0.21 percent, at 15,245.38 at 14:53. The index tracks the real-time performance of MCX Gold and MCX Silver futures.
Sriram Iyer, Senior Research Analyst at Reliance Securities, said, “International and domestic silver prices are trading weak in Monday afternoon trade. LBMA Silver Spot is trading above 21 but near the 50-Daily Moving Average at $24.10 levels indicating some sideways-to-marginal upside momentum where it could trade in a range of $23.75-$24.40 levels.”
“MCX Silver March is trading well above its short moving averages of 21 and 50 at Rs 61,825 but still below its 100-day moving average at Rs 64,003, which suggests prices could remain between the moving averages and a breakout on either side will be required for a clear price direction,” said Iyer.
In the futures market, silver for March delivery touched an intraday high of Rs 63,933 and a low of Rs 62,380 per 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 slipped Rs 763, or 1.2 percent to Rs 63,050 per kg at 16:25 hours with a business turnover of 11,959 lots. The same for the May contract edged lower by Rs 778, or 1.20 percent, to Rs 63,819 per kg with a turnover of 117 lots.
The value of March and May’s contracts traded so far is Rs 1707.60 crore and Rs 16.48 crore, respectively.
The spot gold/silver ratio currently stands at 76.95 to 1 indicating that gold has outperformed silver.
Anuj Gupta, DVP- Commodities and Currencies Research, Angel Broking Ltd, said, “As for today traders can go for buy in silver at Rs 63,300 levels, with the stop loss of Rs 62,700 levels and for the target of Rs 64,500 levels.”
At 10:59 (GMT), the precious metal dropped 1.48 percent quoting at $23.89 an ounce in New York.