Silver futures traded on the Multi Commodity Exchange (MCX) seem to be losing momentum.

After surging over 5 per cent on a single day on December 9, the uptrend in the contract has paused.

MCX silver futures contractfailed to decisively breach the psychological ₹39,000-a-kg-mark and reversed lower from the high of ₹39,042. It fell to a low of ₹37,152 on Tuesday and is currently trading near ₹37,625.

Immediate resistance is at ₹38,000. Inability to breach this hurdle can drag the contract lower to ₹37,000 or even ₹36,500 and ₹36,285 levels in the coming days.

However, ₹36,500 and ₹36,285 are strong supports, and an immediate break below these levels looks unlikely.

Nevertheless, traders with a short-term perspective can remain on the sidelines and wait for declines. Long positions can be initiated at ₹36,500. Stop-loss can be placed at ₹35,800 for the target of ₹37,500.

On the global front the spot silver ($16.50/ounce) is finding support near $16. As long as the price sustains above $16, a rise to $17 looks likely this week.

The outlook will turn negative only if the price falls below $16 which can then drag the spot silver price lower to $15.5. But such a fall looks less probable at the moment.

A rise in the global silver price to $17, coupled with a weak rupee could limit the downside for the MCX-Silver futures contract and push the price higher in the coming days.

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

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