US, India Silver Futures May Witness Further Upward Movement

On Wednesday, US Gold December futures at New York Mercantile Exchange has risen $0.11 to $32.59 in electronic trading thanks to recovery in US equities which augurs well for the white metal’s industrial demand. On Tuesday trading, it outperformed gold at times reaching the highest level since October 19th.

On the daily charts, Comex Silver December has seen an wedge formation in November till date suggesting that break of resistance at $33 levels could signal further upward movement to $34 or $35 levels in the near-term. But a rising wedge is indicate of a bearish pattern emerging in silver, so investors need to watch out closely for any reversals at present levels. MACD is in positive territory raising prospects of further gains in prices. (See Charts at bottom). At present levels, silver is trading above 4,9, 18 day moving averages suggestive of a bullish trend emerging in the near-term. Altogether, signals appear mixed with no clear pattern emerging so far.

Silver has also been supported by India festival demand which has pushed prices higher for gold in both spot and futures. Silver prices rose 20% in the past two months to Rs 62,300 as higher gold prices and higher rural demand for the white metal on weaker rains during the Kharif season (June to September) caused demand to rise comparative to gold. Silver in India gave 12.84 per cent returns in Samvat 2068 to end the year at Rs 62,365 a kg from Rs 55,270 a kg the same day of the previous year.

At India’s Multi Commodity Exchange, Silver December chart is also seeing an uptrend thanks to festival demand but volumes and open interest which hit highs just ahead of Diwali has now weakened. On Wednesday trade at noon, Silver December futures have risen 0.50% to 61109 with near term support seen at Rs 60,000, 59,500 levels while resistance is seen at 61500, 62,000 levels.


By Sreekumar Raghavan