The outlook for the silver futures contract traded on the Multi Commodity Exchange (MCX) is bearish. The contract has been falling continuously since October 29. It is currently trading at ₹33,750 per kg. However, key short-term supports are coming up for the contract at ₹33,300 and ₹33,150.

Since the contract has been falling continuously for more than three weeks, there is a strong likelihood to see a bounce back rally from the above mentioned support levels. Such a reversal may have the potential to take the contract higher to ₹34,500 or even to ₹35,000 - the next key resistance level. The upside for the contract is expected to be capped to these resistances.

A downward reversal from there will see the contract falling to ₹33,000 levels again. Further break below ₹33,000 can drag the contract lower to ₹32,000 and ₹31,800.

Traders with a short-term perspective can wait for a rally to ₹34,500 and ₹35,000 to initiate fresh short positions. Stop-loss can be kept at ₹36,000 for the target of ₹33,200.

However, traders with a medium-term perspective can go short at current levels with a stop-loss at ₹36,000. Intermediate bounce to ₹34,500 and ₹35,000 can be used to accumulate short positions for the target of ₹32,300.

On the global front, the spot silver price ($14.23 per ounce) hovers above a key support level poised at $14. A strong break below this support can drag the price lower to $13.

On the other hand, a reversal from $14 can see a relief rally to test the key resistance at $15 after which the price can resume its overall downtrend.

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