MCX-silver stuck in a narrow range
Mumbai-India (Oct 21) The silver futures contract traded on the Multi Commodity Exchange (MCX) has been stuck in a narrow range of ₹38,360 and ₹39,180 per kg in the past week. The contract has been struggling to breach its key hurdle at ₹39,000 for more than two weeks.
However, the price action on the chart reflects less selling interest in the contract. This keeps the bias positive for the contract to break the resistance at ₹39,000 in the coming days.
On the global front, the spot silver ($17.4/ounce) is holding well above its support at $17. As long as it trades above this level, there is a strong probability for the spot silver to rise to $18 in the coming days. Only a break below $17 will turn the short-term outlook negative and take the spot silver to $16.65 there after.
A rise in the global silver price could push the MCX-silver futures contract also higher. A strong break and close above ₹39,000 will add momentum to the bullish view. Such a break can take the contract to ₹39,500 or even ₹40,000 there after.
Traders with a short-term perspective can go long at current levels with a stop-loss at ₹38,250 for the target of ₹39,500.
The short-term outlook will turn bearish for the MCX-silver futures contract only if it declines decisively below ₹38,000. It will then increase the danger of revisiting ₹37,000 levels in the downside. However, such a fall looks less probable at the moment.