Silver outlook: While gold price glitters, silver shines too

While Gold has been moving from strength-to-strength, attaining a new life time high of Rs 48982 on MCX, on Wednesday, silver too has been moving with a good momentum. The bullion attained a 3 week high on Wednesday, senior technical analyst Anuj Gupta said.

The precious metal has a good outlook in the near term as lockdown restriction ease. Beginning of the industrial activity across the world augurs well for silver, Gupta said. It is growing in tandem with the gold, he added.

The metal is used for different industrial purposes including in the manufacturing of electronic and medical equipment.

Gupta, who is a Deputy Vice President, Commodity and Currency Research at Angel Broking further said that the demand for silver is increasing in the light of gold prices firming up and there are chances that the yellow metal would become even more expensive. Small investors are preferring silver as a viable option.

Another factor that is aiding this bullion metal is the likelihood of a demand coming from rural India, the technical analyst said.  Gupta said that this year’s monsoon has been benign so a rise in demand for silver in physical form can be expected. Traditionally, people in rural parts like to spend some part of their disposable incomes on jewellery.

The September Silver Futures are likely to trade between Rs 51000-Rs 52000 per 1 kg by the end of Friday’s trading session, Gupta said. Today at 11:35 am, the silver futures were trading at Rs 49231 on the MCX, down by almost 0.4 per cent from the previous close on Wednesday. It had previously ended at Rs 49424.

Gupta said that Silver futures and ETFs will remain in good demand in the near term.

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As for international prices, the CME July 2020 Silver futures ended at USD 18.100 per ounce on Wednesday down by 0.033 cents. The silver futures are likely to trade between USD 19 and USD 20 by the end of Friday session, Gupta said.