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SILVER

MCX Silver Futures has fallen during the June month so far, due to rising bond yields and US Dollar Index with the US FED taking a hawkish stance with greater possibility of hike in interest rate; two times by the end of the year 2023, Moreover, FED is also likely to go for bond buying once the US economy has reached back the pre-covid-19 levels with improved inflation and reopening of the economic activities. By 21st June, MCX Silver futures closed at Rs.67762/kg, lower by 5.71% compared to Rs.71898/kg reported on 31st May.

For the coming month, we are estimating global silver prices to trade sideways to bearish as ETF investments has shown slowdown in the global markets with reopening of the global markets adding strength to stocks over previous metals. Correspondingly, silver prices to also find pressure from the higher levels as the domestic prices of industrial commodities has been reported to be expensive for imports. Moreover, silver eagle coins sales on the monthly basis, may prominently see fall, even though vaccination process is expected pick up pace, with China moving ahead with price corrections. Conversely the gold silver ratio which has come down to 68-70 levels still indicating cheaper silver prices which can support prices from the lower levels. In the case of India, lower demand during the non festive season in India is expected to bring a choppy trade in the silver commodity. Correspondingly, the Indian equity market has sustained well in the month so far with further positivity expected during the months ahead. This is expected to support the base metal prices in the longer duration and silver prices. Overall, investors with cautious note should remain sideways to bearish or sell on rise in MCX Silver futures for the month ahead.

On the daily chart, MCX Silver (July) future has been trading in Symmetrical Triangle pattern from last couple of days. Although, the price may take immediate support of prior demand zone & lower band of pattern which indicate a bullish reversal in the counter for near future. In addition, the price has also been trading above the 200 Exponential Moving Averages, which suggests bullish strength. Moreover, a momentum indicator RSI (14) is at oversold zone which indicates reversal (same as prior)in the counter for the near future. Furthermore, In COMEX division silver has strong support at $24.50. However, on an hourly chart silver formed Descending Triangle Pattern, which indicates some bearishness. Hence, based on above technical structure we are recommending buy on dip strategy in MCX Silver (July) around 66200 or a fall in the price till 65950 levels, that can be used as buying opportunity for the upside target of 69000. However, the bullish view will be negated if MCX Silver (July) future close below the support level of 64900.

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