Silver jumps in India
MUMBAI-INDIA (JULY 22) MCX Silver July contract - Silver has been stuck up in tight range with slight bullish bias, trading near critical support line, if market and trade above this support line then minimum bounce back is possible till 41300 and 41900. Traders can buy with stop loss below 39800. Major support remains near 30800 if market hold and trade below this level then market may try to test recent levels of 38500. Fundamental Update
Bullion futures are likely to find support as fears that the US Federal Reserve may end its monetary stimulus measures soon have eased, said analysts. Secondly, physical buying interest still appears to be very high.
The Shanghai Gold Exchange delivered 1,098 tn of physical gold in the first half of the year, which is almost the level of the whole of last year and more than double the country's total annual gold production.
Fed Chairman Bernanke admitted that "nobody really understands gold prices", including him. Yet, he added that a reason for gold's recent sharp selloff has suggested that "people are less concerned about extreme outcomes, particularly negative outcomes, therefore they feel less need for whatever protection gold affords".
The outlook for gold remains uncertain, while the market has increasingly looking for further weakness on price on investment outflow and sluggish physical demand, official holdings have remained resilient.