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The silver futures contract traded on the Multi Commodity Exchange (MCX) has surged over 5 per cent in the past week to record a high of ₹40,574 a kg on Monday. The contract has corrected from this high and is hovering at ₹39,990 levels. Although the current pull back move can extend further to test the next support at ₹39,500 and then at ₹39,180, the broader outlook remain bullish. Declines to the above mentioned supports would attract fresh buyers in the market. As such the contract can continue to rise further in the coming days to the targets of ₹41,200 and ₹41,500.
Traders with a short-term perspective can go long at current levels. Stop-loss can be placed at ₹39,050 for the target of ₹41,200. Long positions can be accumulated on declines at ₹39,500 and ₹39,200.
The outlook will turn negative only if the contract records a strong close below ₹39,000. The ensuing targets on such a break will be ₹38,700 and ₹38,500.
On the global front, the spot silver ($17.45/oz) has sharply declined after recording a high at $17.78 on Monday. It can decline further to test its immediate supports at $17.3 and $17. An immediate break below $17 looks less probable. But, a reversal from $17 can take the price higher to the target of $18.1 in the coming days. Such a rally would aid the MCX-Silver futures contract also higher as the domestic price moves in tandem with the global price.
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