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The silver futures contract traded on the Multi Commodity Exchange surged about 5 per cent last week. The price of silver has rallied 10 per cent since June 6 outperforming gold and Brent crude which had risen 5 per cent each over the same period. The outlook is bullish, but significant resistances are ahead for the commodity which suggests that traders need to be cautious.
The global silver price has surged above the key $20/ounce level. Though there is some resistance near current levels at $21.3, the probability is high for a breach of this level. Such a break can take silver higher to $22.3 which is the next significant resistance level. If silver fails to break theresistance at $21.3, it can fall back to $20.5 and $20.2 in the short-term.
On the domestic front, the MCX-silver futures contract has risen sharply above ₹44,000/kg level. The contract is now consolidating above this level over the last couple of day. Key short-term supports are at ₹44,200 and ₹44,000. The outlook is bullish. Some resistance is at ₹45,000. A break above this level can take the contract higher to ₹45,700 initially and then to ₹46,300 thereafter. The level of ₹46,300 is a crucial resistance level which has to be breached in order to signal a trend reversal.
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