Silver futures witnessed a decline on the Multi Commodity Exchange (MCX) on Tuesday, dropping by 0.26 per cent to settle at Rs 27 lakh per kilogram. The fall was attributed to profit-booking by traders and subdued global cues, as investors awaited further economic data for direction.
Market Overview
The most-traded silver contract for March delivery ended at Rs 27,00,000 per kg, down from the previous close of Rs 27,07,000. Analysts noted that the precious metal faced headwinds from a stronger US dollar and rising bond yields, which dampened demand for safe-haven assets.
Global Factors at Play
Internationally, silver prices edged lower in line with gold, as market participants assessed the Federal Reserve's monetary policy stance. The spot silver price in the international market hovered around $23.50 per ounce, reflecting a marginal decline. Profit-booking emerged after a recent rally, with traders locking in gains ahead of key US economic reports.
Domestic Demand and Supply
In the domestic market, demand for silver remained tepid amid ongoing industrial slowdown concerns. However, lower prices attracted some buying from jewellers and industrial users. Inventory levels at major warehouses were reported stable, with no major supply disruptions.
Technical Outlook
From a technical perspective, silver futures are facing resistance at Rs 27,200 per kg, while support is seen at Rs 26,800. Analysts suggest that a break below the support level could trigger further selling, while a move above resistance may lead to short-covering. The relative strength index (RSI) is currently at 48, indicating neutral momentum.
Expert Views
"The decline in silver futures is largely profit-booking after a recent uptick. Global cues remain weak due to a stronger dollar. We advise traders to remain cautious and wait for clearer signals," said a senior commodity analyst at a leading brokerage firm. Another expert added that industrial demand may pick up in the coming months, providing support to prices.
Conclusion
Silver futures are expected to trade in a range, influenced by global economic data, currency movements, and investor sentiment. Traders should monitor developments in the US dollar index and bond yields for further cues. The near-term trend appears bearish, but any positive surprise in economic data could reverse the trend.
