Fresh selling seen in MCX Silver; Resistance seen at 42137
Commodity Online | October 17 2016
UPDATED 10:05:47 IST

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Silver on MCX settled down -0.16% at 41821 with market participants seeing further downside for the precious metal in the near-term amid US dollar strength. Prices has come under pressure in recent weeks as investors worry about the threat of higher interest rates and an end to monetary easing. Federal Reserve Chair Janet Yellen gave a broad review of where the U.S. economic recovery may still fall short.

Boston Fed President Eric Rosengren said that investors were probably right in placing "very high" odds on a U.S. interest rate increase in December.U.S. consumer sentiment unexpectedly fell in October, hitting more than a one-year low and underlining concern over the wider economy, according to a report. The preliminary publication of the data for October from the University of Michigan's Consumer Survey Center showed that consumer sentiment unexpectedly declined to 87.9 from 91.2 in September.

That was its lowest reading since September 2015. US data showed unemployment claims from September 29 through October 6 came in at 246,000, below the 252,000 forecast. Import prices month-over-month in September were in-line with expectations at a 0.1% gain. The Fed's minutes of its last rate-setting meeting, showed several policymakers felt a rate hike was warranted "relatively soon" if the U.S. economy continued to strengthen, and prompted investors to raise their bets of an increase at its December policy meeting.

Markets are now pricing in around a 70 percent chance that the Fed will move. Technically market is under fresh selling as market has witnessed gain in open interest by 1.47% to settled at 16478 while prices down -69 rupee, now Silver is getting support at 41537 and below same could see a test of 41252 level, and resistance is now likely to be seen at 42137, a move above could see prices testing 42452.

Trading Ideas:
--Silver trading range for the day is 41252-42452.
--Silver prices dropped with market participants seeing further downside for the precious metal in the near-term amid US dollar strength.
--U.S. retail sales rebounded 0.6 percent in September while producer prices also rose broadly to record their biggest year-on-year increase since December 2014.
--Holdings at ishares silver trust gained by 0.32% i.e. 35.42 tonnes to 11268.35 tonnes from 11232.93 tonnes.

Courtesy: Kedia Commodities