Benefiting from increased safe haven appeal amid an emerging market rout following last week's shocking China Yuan devaluation move, Silver was trading with impressive gains in evening trade in the domestic market on Monday.
Investors are betting that China's move to devalue its currency by the most in two decades may cause competing emerging markets to engage in a currency war to boost export competitiveness, signaling more fragility for the global economy while possibly delaying a Fed interest rate hike as the dollar strengthens, bolstering the lure for the bullion as a store of value.
However, a stronger dollar limited the gains in Silver, by curbing the demand for the precious metal as an alternative asset. Stronger greenback makes Silver more expensive for those holding other currencies, thus dimming demand.
At the MCX, Silver futures for September 2015 contract is trading at Rs 35,618 per 1 kg, up by 0.53 per cent after opening at Rs 35,597, against the previous closing price of Rs 35,429. It touched the intra-day high of Rs 35,697 (At 16:21 PM).