Silver on MCX settled down -0.26% at 42532 as growing expectations for a March rate hike in the U.S. and a stronger U.S. dollar continued to weigh on the precious metal. The greenback remained broadly supported after a number of Federal Reserve officials this week expressed their support for a March rate hike. The U.S. Department of Labor said initial jobless claims declined by 19,000 to 223,000 in the week ending February 25 from the previous week’s total of 242,000.
Fed Chair Janet Yellen added her influential voice, saying a hike this month would be "appropriate" if economic data hold up. Federal Reserve policymakers who have recently signaled a pending U.S. interest rate rise are correct given the growing confidence and aggregate demand in the economy and stock market since the U.S. election, the Fed's vice chairman said.
If there has been a conscious effort (to raise expectations for a rate hike) I'm about to join it," Stanley Fischer told an economists' forum, when asked about comments by other Fed officials this past week that have boosted market odds of a March rate hike. Even if details remain unclear from U.S. President Donald Trump and the Republican-controlled Congress, Fischer predicted a "positive" effect.
A strong U.S. dollar usually weighs on bullion, as it dampens the metal's appeal as an alternative asset and makes dollar-priced commodities more expensive for holders of other currencies. Holdings at ishares silver trust dropped by 0.71% i.e. 73.66 tonnes to 10350.88 tonnes from 10424.54 tonnes. Technically market is under long liquidation as market has witnessed drop in open interest by -0.88% to settled at 11026, now Silver is getting support at 42354 and below same could see a test of 42177 level, And resistance is now likely to be seen at 42704, a move above could see prices testing 42877.