The silver futures contract traded on the Multi Commodity Exchange (MCX) fell 2 per cent last week. However, the contract has bounced back taking support at around ₹45,500 and has recouped its previous week’s loss in the first two trading sessions this week.

On Wednesday, the contract extended its up move by ₹789 or 1.7 per cent and has decisively breached a key resistance at ₹46,000. It is currently trading at ₹46,927 per kg. This rally has also breached its 50-day moving average and trades well above it. The indicators and oscillators in the daily chart are showing mixed signs.

The contract faces a key resistance ahead at ₹47,000. Conclusive breakthrough of this hurdle can take the contract upwards to ₹47,500 and ₹48,000 in the short term. Traders with a short-term view can consider initiating fresh long positions above ₹47,000 with a stop-loss at ₹46,500.

On the other hand, a decisive plunge below the key supports at ₹46,000 and ₹45,500 will mar the near-term bullish momentum and pull the contract down to ₹45,000 and ₹44,500 thereafter. Significant resistance beyond ₹48,000 is placed at ₹49,000.

On the global front, the spot silver price took support at $18 per ounce and bounced gaining 2.6 per cent in the first two trading sessions this week. Sustaining this bullish momentum, the prices surged 2 per cent on Wednesday to trade at $19.68. Key resistance is at $20. Strong rally beyond this level can push the price higher to $20.6 in the short term. Significant supports are placed at $19 and $18.5.

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

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