The short-term outlook for the silver futures contract traded on the Multi Commodity Exchange (MCX) is bullish. The contract’s sharp fall from the high of ₹37,790/kg recorded on April 29, found support at ₹36,000. However, the contract has reversed higher again and trades near ₹37,300. Supports are at ₹37,000 and ₹36,500. A rise to test the 200-day moving average at ₹38,350 looks likely now.

Short-term traders can go long. Stop-loss can be placed at ₹36,700 for the target of ₹38,200. The short-term outlook will turn negative only if the contract records a strong break below ₹36,000. Such a break can drag it to ₹35,500 and ₹35,000 there after. However, such a sharp fall looks unlikely at the moment.

On the global front, the short-term outlook for the spot silver ($16.5 per ounce) is also bullish. The price dipped below $16 last week, but the commodity did not record a close below this psychological support level. It has reversed sharply higher immediately from the low of $15.8. This reflects higher buying interest coming into the market at lower levels for silver. There is no immediate danger for a sharp fall in the coming days as long as it traders above the immediate support at $16. A rise to $17 and $17.15 – the 200-day moving average resistance level is possible in the coming days. This rise in the global spot price could aid the MCX silver futures contract price also to move higher. The domestic price moves in tandem with the global spot prices.

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

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