Silver prices slump nearly Rs 4000/kg in 2 days; should you buy the dip?
Silver prices toppled sharply over the past two days. falling nearly Rs 4,000 per kg as worries concerning the Fed rate cut after the hotter-than-expected US PPI data triggered selling pressure in the precious metals.
Silver prices in Friday's trade (December 13) fell over Rs 700 per kg on the MCX as strength in the dollar index weighed. On the previous day, silver March futures settled at Rs 92,633 per kg.
MCX March silver contract down over Rs 500/ kg
After hitting the low of Rs 91,907 in intra-day trade, last at around 11:20 am, silver March futures quoted weak by 0.58 per cent or Rs 538 at Rs 92095 per kg.
Dollar index gains continue to weigh on precious metals
In the previous day's trade, silver March futures contract settled with a steep cut of over 3 per cent on the back of hotter-than-expected U.S. PPI data.
Hotter-than-expected US PPI data adds to the woes
The U.S. PPI came up at 0.4 per cent in November just double from the expectations of 0.2 per cent and the annual PPI reading came at 3.0 per cent which is very high from the FED’s target rate of 2.0 per cent. Core PPI came in-line at 0.2 per cent.
Selling in precious metals deepened amid lingering worries over Fed rate cut
Manoj Jain, Commodity Expert at India Nivesh said hotter than expected PPI data increased worries about the Federal Reserve rate cuts and triggered selling in precious metals.
International silver futures rate
Internationally, Silver futures March contract was down 0.56 per cent at $31.45
Silver support and resistance levels
According to Jain, silver has support at $31.20-30.88, while resistance is at $31.94-32.40 per troy ounce in today’s session. At MCX, silver is having support at 91800-91100 and resistance at 93300-94200.
Trading strategy in silver
Jain suggests day traders should stay away from precious metals in today's session but long term investors can accumulate at lower levels.