Silver On MCX Settled Down -2% At 39263

Silver on MCX settled down -2% at 39263 as pressure seen after U.S. congressional leaders reached an agreement to fund the government through the fall. U.S. factory activity slowed in April while consumer spending was unchanged in March and a key inflation measure recorded its first monthly drop since 2001, but still expect an interest rate increase in June as the labor market tightens. Worries about tensions over the Korean peninsula eased after U.S. President Donald Trump on Monday opened the door to meeting North Korea's Kim Jong Un, saying he would be honored to meet the young leader under the right circumstances, even as Pyongyang suggested it would continue its nuclear weapons tests.

Firmer equities discourage the buying of non-interest-paying bullion, which is priced in dollars. The dollar hit a one-month high against the yen, lifted by Treasury yields which surged after U.S. Treasury Secretary Steven Mnuchin commented on the possibility of ultra long-term bond issuance. Mnuchin also said that economic growth of three percent is achievable in the next two years as the Trump administration sets out to dramatically cut taxes. The Fed is widely expected to hold rates steady, but investors will focus on the language of the statement for guidance on the number of rate increases this year and next. Interest rate futures are still pricing a roughly 70 percent chance the Fed will raise rates in June, according to the CME's FedWatch. Technically market is under fresh selling as market has witnessed gain in open interest by 21.77% to settled at 16897 while prices down -800 rupees, now Silver is getting support at 38971 and below same could see a test of 38679 level, And resistance is now likely to be seen at 39765, a move above could see prices testing 40267. 
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Suhani Verma

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