Silver prices gained in line with gold prices for the month of October, mainly due to rally in the yellow metal and sliding USD against Euro. Investment demand of Silver is closely related to global financial liquidity and USD trend.
Fall in USD against the basket of major global currencies led the precious metal prices to the upper side last month. On the supply front, there are expectations that mines can reduce the supplies in remaining 2009 which can be supportive for the metal prices in the medium term.
Peruvian precious metals miner Buenaventura said that it expects to produce 17.5 million ounces of silver this year, down from an earlier forecast of 19.5 million ounces. In 2010, prices will benefit from the huge export decrease of Chinese primary silver.
For October, unlike gold, the white metal failed to breach the previous month’s high. Market struggled to hold Rs.27500/kg levels at MCX. This means that any round of profit booking in bullion will have a more severe impact on silver.
Trading advice would remain just as in case of gold, i.e. to buy at support levels. Precious metals do appear to be in a multi month bull run and investors need to capitalize on the same.
All the short/medium term indicators like MACD and 50 days EMA are also supporting prices to move further on the higher side in the near term. At present, Silver is seen facing stiff resistance in Rs27600-28000/kg range, a breach of which should make way for unseen like before prices of over 30000 to be seen. On the contrary, Rs. 26000/kg could be the short term support where a breach could be bearish for near term.
Courtesy: Religare Commodities Unbelievable platform to trade commodities online. Join now
