Silver prices crashed on the Multi Commodity Exchange on Monday, with the white metal falling more than Rs 7,000 and slipping below the key Rs 2,28,000 level.
The sharp decline in domestic silver prices comes amid a broader sell-off in precious metals as rising oil prices have intensified inflation concerns and strengthened expectations of further interest-rate hikes by the US Federal Reserve.
Higher interest rates and Treasury yields tend to weigh on precious metals as they do not generate interest income. A stronger US dollar also makes dollar-denominated metals more expensive for buyers holding other currencies.
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Silver Price On MCX
At around 12:36 pm on Sept. 28, the December silver futures contract on MCX was trading at Rs 2,27,494 per kg, down Rs 7,202, or 3.07%, from its previous close of Rs 2,34,696.
According to Ponmudi R, CEO of Enrich Money, the white metal has been declining sharply even when there is robust industrial-demand support for the metal. This indicates broader macro pressure from the dollar and yields currently outweighing that demand factor.
Silver Price Outlook
Ponmudi said MCX silver has slipped below the Rs 2,32,000 - Rs 2,33,000 zone, which had earlier acted as support and is now likely to act as resistance. The metal is testing the Rs 2,27,000 -Rs 2,28,000 support region, which coincides with its 200-day exponential moving average.
Immediate resistance is seen at Rs 2,32,000–Rs 2,33,000, followed by Rs 2,36,000–Rs 2,37,000. On the downside, support is placed at Rs 2,27,000–Rs 2,28,000, followed by Rs 2,23,000–Rs 2,24,000.
The Relative Strength Index, or RSI, at 41.12 and below its signal line indicates fading momentum, Ponmudi said. A sustained move above Rs 2,32,000 would be needed to stabilise the structure, while a decisive break below Rs 2,28,000 could open the way towards Rs 2,24,000.
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