Wednesday, March 16, 2011

Silver slumps tracking gold prices

The spot silver slid 4.67 percent from its prior day’s movement and ended at $34.25 levels. The similar movement was also seen on futures contract in COMEX and MCX and closed at $34.12 and Rs. 52084 levels respectively.
Silver prices plunged on the Greenback’s gain. Global equities stumbled, NIKKEI being the most adversely affected by 10.55% while DJIA and FTSE followed the same.
The PGM as a group fell back on the selling pressure of investors to raise cash as all other commodities and equities dropped. Silver lost on the expectation of waning industrial demand.
OUTLOOK:
The COMEX May future is currently quoting $34.285, up by 0.49%. In the MCX platform Silver May delivery price came down largely on the back of a huge participation with higher open interest. This clearly shows the bearish outlook on this commodity.
The economic data releases today are also likely to have a mixed impact on silver. However; the FOMC’s statement about a firm recovery may play major role to increase industrial demand in near term.
The Asian equities are recovering from the fall but this gain might not continue as Moody’s credit rating has down graded Portugal.
Overall, we expect silver to trade lower for the day and it is recommended to be short on higher price.