Spot Silver prices ended in the red due to profit-taking at higher levels
SPDR Gold Trust said that its holdings stood at 1,086.47 tonnes as of 17th September, unchanged from Wednesday
MARKET RECAP
Spot Gold prices retreated after touching a high of $1,024/oz yesterday as profit-booking creeped in. But the weaker dollar provided support to the downside. This profit-booking at higher levels was inevitable as the rally has been phenomenal in the last few days. Spot gold prices have gained more than 7% in the last five weeks and the upside could continue if the dollar continues to remain weak. Spot Silver prices too declined yesterday as profit-booking came in.
Silver prices have gained steadily in the last three weeks new demand from electronic appliance makers for the metal has provided support. This rise in demand could strain global supplies. Upbeat outlook from computer and appliance makers who use silver for batteries has also helped the metal gain further. Apart from traditional use in jewelry, silver is largely used in demand for solar energy and water purification components.
In the currency market, The Euro gained yesterday as a weaker dollar coupled a rise in risk appetite led to investors entering riskier currency trades. The Euro hit a one year high against the dollar and closed at 1.4740. For the day, support is seen at 1.4695/1.4650 whereas resistance is seen at 1.4775/1.4810. The Indian Rupee appreciated further on Thursday to close at 48.16. However, it slipped from the gains made in early trade. Rising equities led to hopes of further capital inflows in the country. For the day, support is seen at 47.95/47.80 whereas resistance is seen at 48.25/48.40.
OUTLOOK
We has mentioned in yesterday’s report that silver prices could come under pressure. Silver prices have gained sharply in the last three weeks and the current week is no exception. However gains have been phenomenal in a short time span. Though there are fundamental reasons to back this rally we feel that the metal could come under pressure. Currently, silver prices are trading around $17/oz and compared to levels three weeks ago the metal has gained a whopping 21%. Hence, we could witness some technical selling in the near-term but prices will bounce back after witnessing a dip.
On intraday basis, Spot Gold prices have immediate support at $1006/$1000 whereas resistance is seen at $1020/$1029. Spot Silver prices shall find support at $17.00/$16.85 whereas resistance is seen at $17.50/$17.85.
MCX October Gold has support at 15790/15730 whereas resistance is seen at 15945/16030. MCX Dec Silver shall find support at 27260/27065 whereas resistance is seen at 27805/28155 levels.
