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The silver futures contract traded on the Multi Commodity Exchange (MCX) has declined below its key support level of ₹36,000/kg as expected in the past week.
The contract is currently trading near ₹35,625. Any upward reversal in the coming days could find strong resistance in the ₹36,000-200 zone. The contract is now vulnerable for a fall to ₹35,000 in the short term.
Traders can go short. Stop-loss can be placed at ₹36,150 for the target of ₹35,050. Intermediate rallies to ₹36,000 can be used to accumulate short positions.
The picture could turn worse if the contract breaks below ₹35,000. In such a scenario, the contract will be in a big danger of extending its fall to ₹34,000 levels.
The downside pressure will ease only if the contract records a strong close above ₹36,200. Such a break can take the contract higher to ₹37,000 and ₹37,500 levels once again.
On the global front, the spot silver ($15.75/ounce) has key supports at $15.50 and $15.35. These levels are likely to be tested in the coming days.
Whether the price is going to decline further below $15.35 or not will decide the next leg of move for silver. The US unemployment rate data release is due on Thursday.
The outcome of this day could decide whether silver price will fall below $15.35 to $15 or lower levels else it can reverse higher again to $16 and $16.50 levels.
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