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MCX Silver Technical Target Rs 61950 as Rate Hike Slows Down Growth

ByCommodityOnline
Published 10/28/2011, 09:29 AM
Updated 05/14/2017, 06:45 AM
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MCX silver has surged by over 8.50% for the week. MCX silver December is currently trading at Rs57800 after opening Monday at Rs 53188. With RBI hiking interest rates and the global economy rocking like a bamboo raft in a pacific storm, silver might target the Rs 61950 area if the current upside move continues.

-Fundamentally, the Euro deal, even though eased concerns of a European financial meltdown, still look weak against the mountain of debt the EU nations have build up.

As such, silver might track gold and aim higher. However, the current correlation of precious metals with the general commodities market will mean that silver bull rally can only start once gold regains its title as safe haven and investment demand picks up.

-US overall has been positive, with Q3 GDP growth at a strong 2.5% and company earnings beating Wall Street expectations.

-In India, growth is slowing thanks to RBI's tight monetary controls. With a priority on inflation control, RBI's interest rate hikes have done nothing to contain the inflation and in turn has slowed down growth. Indian GDP growth for the current fiscal year has been lowered to 7.6% from the previously estimated 8%.

-In China, Q3 GDP was the slowest in almost 2 years and investors are expecting a hard landing in China.

Technical

Silver may target the area of Rs 61950 if it exceeds Rs 58850. The support at Rs 53850 is pretty strong as prices have clustered around that level for many weeks before bouncing to current level.

If prices break above Rs 61950, silver could target the previous high of around Rs 70500 and then Rs 75000

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