The outlook for silver futures traded on the Multi Commodity Exchange has turned bearish. The contract has declined below the key support at ₹37,000 a kg. It is down about 3 per cent in the past week and is currently trading at ₹36,200. The key resistance is in the ₹37,000-37,150 zone. Though an intermediate rise to test his resistance cannot be ruled out, a breach of this hurdle looks less likely. Fresh selling interest is expected on rallies to this resistance zone. The support at ₹36,000 is holding, as of now. However, a reversal from ₹37,150 levels will increase the danger of the contract declining below ₹36,000. Such a fall can drag the contract to ₹35,000 in the coming days.

Traders can go short at current levels. Stop-loss can be placed at ₹37,200 for the short-term target of ₹35,150. Intermediate rallies to ₹37,000 and ₹37,150, if seen, can be used to accumulate positions.

The bearish outlook will be negated only if the contract records a strong break and closes above ₹37,150. In such a scenario, it can gain momentum for a rise to ₹38,000 levels. But such a rally looks unlikely as the global spot silver prices ($16.10/ounce) are also looking bearish. The global price has resistances at $16.35 and $16.5. It can break and fall below $16 towards $15.45 in the coming days. Silver futures will also take cues from this fall as it moves in tandem with the global spot silver prices.

Note: The recommendations are based on technical analysis. There is a risk of loss in trading.

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