Silver On MCX Settled Up 0.8%

Silver on MCX settled up 0.8% at 40777 as prevailing dollar weakness continued to underpin precious metals. Prices seen support tracking gain's from Gold as prices rallied above $1290 level as safe-haven demand soared, ahead of risk events that could rattle markets while the dollar fell to its lowest level since November as investors questioned the strength of the U.S. economy amid weak economic data.

In Gold Silver ratio yesterday, Gold’s premium over silver has declined over the past four weeks, reflecting the latter’s outsized percentage gains. By the end of Monday’s session, one ounce of gold was worth 72.91 ounces of silver. That represents a decline of 3.5% over the past 30 days. Still, both metals are hovering at six-week highs. While the gold/silver ratio of 73 is above the long-term average of about 60. In economic data, Eurozone retail sales rose 0.1% in April, following a 0.2% increase the previous month, the European Commission’s statistical agency said.

That translated into a year-over-year gain of 2.5%. Support also seen as traders already had been expected to favor safety plays in this action-packed week, with three events sparking worries: a ECB announcement, the U.K. general election and former Federal Bureau of Investigation boss James Comey’s testimony before a Senate panel. The panel is investigating Russian efforts to interfere in last year’s presidential race.

Silver gaining as investors search for safe havens during a period of global upheaval and bets that historically low U.S. interest rates will endure. Technically market is under short covering as market has witnessed drop in open interest by -3.34% to settled at 14041 while prices up 324 rupees, now Silver is getting support at 40538 and below same could see a test of 40300 level, And resistance is now likely to be seen at 40928, a move above could see prices testing 41080.

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Suhani Verma

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