Silver prices are down in futures market
Mumbai-India (Mar 30) Silver settled down -0.56% at 38395 eased back after a strong run as a rebound in the U.S. dollar prompted investors to lock in gains from a recent rally after Saudi Arabia launched air strikes in Yemen, while the U.S. dollar weakened.
Bullion traders have been monitoring the direction of the dollar in recent months to gauge the appeal of the precious metal. Prices often move inversely to the U.S. dollar, as gold becomes less expensive for buyers using other currencies. The dollar showed little reaction after Federal Reserve Chair Janet Yellen struck a cautious note on interest rates.
In a speech, the Fed chief said a rate hike may be warranted later this year, but added that weakening inflation pressures could force the Fed to delay. The speech echoed the Fed’s latest policy statement, released on March 18, which indicated that it may raise interest rates more gradually than markets had expected.
Meanwhile, the Commerce Department reported Friday that the U.S. economy expanded at an annual rate of 2.2% in the fourth quarter, unchanged from the preliminary estimate. Another report showed that the final reading of the University of Michigan’s consumer sentiment index ticked down to 93.0 this month from a final reading of 95.4 in February.
A delay in raising interest rates would be seen as bullish for Bullion, as it decreases the relative cost of holding on to the metal, which doesn't offer investors any similar guaranteed payout. In the week ahead, investors will be turning their attention to Friday’s U.S. nonfarm payrolls report for further indications on the strength of the recovery in the labour market.
Technically market is under long liquidation as market has witnessed drop in open interest by -5.49% to settled at 7434 while prices down -218 rupee, now Silver is getting support at 37996 and below same could see a test of 37598 level, And resistance is now likely to be seen at 38721, a move above could see prices testing 39048.