Silver prices soared to Rs 73,645 per kg on February 1 as participants increased their long positions as seen by the open interest. The precious metal had gained 4.6 percent last week on the MCX.
The white metal prices started with a gap up trade on February 1 in Asian trade, up by over 4.5 percent amid talks that silver was the new target for the retail crowd and a wave of fresh enthusiasm from online traders.
Silver has risen nearly 15 percent since the message began circulating on Reddit on January 28 morning urging retail investors to buy silver mining stocks and iShare Silver Trust, an exchange-traded fund (ETF) backed by physical silver bars, in a GameStop-style squeeze.
The US Dollar Index traded marginally higher at 90.53 levels, up 0.02 percent, in the morning trade.
Silver holdings in iShares ETF rose by 1,070.56 tonnes to 18,722.33 tonnes.
Market participants will keep an eye on the Manufacturing PMI data from major economies and also on the Union Budget 2021-22.
MCX iCOMDEX Bullion Index inched higher 251.51 points, or up 1.62 percent, at 15,770.13 at 11:05. The index tracks the real-time performance of MCX Gold and MCX Silver futures.
Sriram Iyer, Senior Research Analyst at Reliance Securities, said, “LBMA Silver Spot has given a breakout above $28 and suggests a strong uptrend in the counter. Silver has resistance at $28.90-30 levels whereas support is at $27.80-26.80 levels.”
In the futures market, silver for March delivery touched an intra-day high of Rs 73,888 and a low of Rs 71,650 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 climbed Rs 3,939, or 5.65 percent, to Rs 73,645 per kg at 11:09 hours with a business turnover of 14,591 lots. The same for the May contract rose Rs 4,059, or 5.74 percent, to Rs 74,800 per kg with a turnover of 1,237 lots.
The value of March and May’s contracts traded so far is Rs 1,156.39 crore and Rs 51.53 crore, respectively.
The spot gold/silver ratio currently stands at 65.15 to 1 indicating that silver has outperformed gold.
Anuj Gupta- DVP- Commodities and Currencies Research, Angel Broking Ltd, said: “As of today traders can go for buy in Silver at Rs 72,000 levels with the stop loss of Rs 70,500 levels for the target of Rs 74,500 levels.”
At 05:42 (GMT), the precious metal jumped 6.52 percent quoting at $28.67 an ounce in New York.