Silver On MCX Settled Up 0.46%

Silver on MCX settled up 0.46% at 40498 tracking firmness in base metals prices after prices remained under pressure along with gold on factors including expectations of a U.S. interest rate rise. The US dollar gleaned strength from news that US durable goods orders rose much more strongly than forecasted – it was up 4.8% month-on-month versus an expected uptick of 1.7%. 

The report is the latest testament to the strength of the US economy and appears to cement the case for the US Federal Reserve to hike rates in December. Market participants now see a 93.5% chance of US rate hike in December, according to the CME FedWatch Tool. In other US data, core durable goods at 1.0% beat the forecast of 0.2% while HPI was also better than expected at 0.6%.

But unemployment claims disappointed at 251,000 – a reading of 241,000 had been expected. US flash manufacturing PMI was in largely in line with expectations at 53.8, and revised UoM inflation was on target at 2.4%. But US crude oil inventories at -1.3 million barrels missed the forecast of 0.3 million barrels.

In central bank news, the US Federal Open Market Committee’s minutes from its November meeting had little surprises as expectations of a December 14 US rate hike remains intact in markets. The Fed said a few participants advocated increasing rates at the November meeting, including voting members Kansas City Fed President Esther George and Cleveland Fed President Loretta Mester.

Technically market is under short covering as market has witnessed drop in open interest by -8.99% to settled at 9862, now Silver is getting support at 40031 and below same could see a test of 39565 level, And resistance is now likely to be seen at 40792, a move above could see prices testing 41087.

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Suhani Verma

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