Silver On The Verge Of An Intraday Meltdown

Silver trading range for the day is 53672-54470. Technically market is getting support at 53823 and below could see a test of 53672 level and resistance is likely to be seen at 54222, a move above could see prices testing 54470. Recent disappointing US jobs reports and other economic indicators have prompted the US central bank to explore new tools to support growth.

Silver traded flat and settled down with a marginal gain of Rs.147.00 as support seen from the rupee weakness after swinging in a wide band after the central bank kept both interest rates intact. Silver dropped in international despite a weaker dollar, ahead of highly anticipated policy meetings by the ECB and the Fed this week.

Spot Silver prices declined 0.8 percent in yesterday’s session. However, weakness in the US Dollar index (DX) cushioned sharp fall in the Silver prices.

The white metal touched an intraday low of $27.89/oz and closed at $27.92/oz on Tuesday. In the domestic markets prices however settled 0.3 percent higher due to depreciation in the Indian rupee after touching high Rs.54,319/kg and closed at Rs. 53,974/kg in yesterday’s session.

Market participants were also eyeing the outcome of the Fed’s policy setting meeting today, amid speculation over whether the US central bank will indicate if further QE measures are imminent. Investors will be focused on the language used in the FOMC policy statement on Wednesday at the end of its two-day meeting.

Crude stabilise after the previous sharp fall

Crude trading range for the day is 4833-5069. Technically market is getting support at 4877 and below could see a test of 4833 level, And resistance is likely to be seen at 4995, a move above could see prices testing 5069.

Crude fell sharply dropped by -1.165 to settle at 4921 as investors sold on sentiment that the Fed might not announce plans to stimulate the US economy when a policy meeting wraps up later today.

Nymex Crude oil prices declined around 2 percent yesterday taking cues from expectations that US policymakers will not announce any stimulus measures to boost the economy after US data came on a positive note in yesterday’s trading session. However, sharp downside in prices was cushioned on the back of more than expected decline in US crude oil inventories coupled with weakness in the DX.

Crude oil prices touched an intraday low of $87.31/bbl and closed at $88.10/bbl in yesterday’s trading session. On the domestic bourses, prices declined by 1.1 percent and closed at Rs.4,921/bbl after touching an intraday low of Rs.4907/bbl on Tuesday.

The ECB's mandate requires it to keep a tighter lid on inflation, which makes the call for QE harder, while the Fed has more wiggle room to spur the economy since it adheres to a dual mandate to control prices but also, to foster optimal job markets.

A suddenly weaker dollar makes oil a nicely priced commodity in the eyes of investors holding other currencies, which opens the door for an oil rally. However, talk the Fed plans to intervene soon has been replaced with talk the Fed may wait until Sept to decide if the economy merits intervention, which sent oil falling.