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Silver tad higher on safe haven demand, dollar pullback

By Religare
|

Silver futures were trading with mild gains during noon trade as rising concerns over the health of the global economy amid fears over a worsening China slowdown and weakening currencies bolstered the safe haven demand for Silver.

Investors shunned equities with Asian stocks hitting a 17-month low as China's Shanghai Composite dropped by over 3 per cent, while markets in Hong Kong and Japan also treaded water after a Chinese factory gauge shrank sharply in August, raising more fears over the world's second biggest economy, bolstering the appeal of safer assets such as the Bullion.

 

A weaker dollar also boosted the demand for Silver as an alternative asset. Weaker greenback makes the bullion cheaper for those holding other currencies, thus bolstering demand.

Doubts over the timing of a maiden Fed rate hike in nine years prompted slight caution among investors as a Fed official stressed that perhaps the Fed needs to target a higher inflation rate, meaning a dovish approach to rate tightening.

At the MCX, Silver futures for September 2015 contract is trading at Rs 36,339 per 1 kg, up by 0.08 per cent after opening at Rs 36,464, against the previous closing price of Rs 36,310. It touched the intra-day high of Rs 36,786 (At 12:18 PM).

Story first published: Friday, August 21, 2015, 23:00 [IST]
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