The silver futures contract traded on the Multi Commodity Exchange (MCX) jumped almost three per cent with an upward gap on Friday as the UK voted to leave the EU in a historic vote.

Subsequently, the global financial markets slumped and precious metals gained.

Last week, the MCX silver futures contract advanced 2.5 per cent, breaching a key resistance at ₹42,000 to close at ₹42,392 per kg.

After testing the resistance at 42,500 for two trading sessions, the contract breached it decisively by gaining ₹622 or 1.5 per cent to trade at ₹42,968 on Wednesday.

Both the medium and short-term trends are up for the contract. It trades well above its 21- and 50-day moving averages.

The indicators and oscillators in the daily chart are featuring in the positive territory. Traders with a short-term perspective can buy with a stop-loss at ₹41,900.

A strong break above the immediate resistance at ₹43,000 can take the contact higher to ₹44,000 in the coming week. Further rally beyond ₹44,000 can target ₹46,000 in the medium-term.

Key supports are at ₹42,000 and ₹41,000. The next important supports are at ₹40,000 and ₹38,500.

A tumble below the vital support at ₹40,000 will mar the short-term uptrend and drag the contract down to ₹38,500.

On the global front, the silver spot price advanced 1.3 per cent amid volatility last week to close at $17.68 an ounce.

On Wednesday, the silver price surged 2.2 per cent breaching a key resistance at $18 to trade at $18.30 levels. This rally has strengthened the short-term uptrend that has been in place since early June low at $15.77.

The metal has immediate resistance at $18.5.

A conclusive rally above this level can take the silver price northwards to $18.7 and $19 in the short term.

Key supports to note are pegged at $18, $17.8 and $17.4.

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

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