As with all other commodities and metals, silver on improved demand outlook and hopes of economic recovery worldwide climbed to a high of Rs. 71,500 on the MCX in the previous day's session (May 7, 2021). On an intra-day basis, the precious white metal scaled to a high of Rs. 72,231 per kg. For the week ending May 7, the gains in silver were phenomenal to the tune of Rs. 3976 or almost 6 percent. This is outrunning the gains in the yellow metal gold which was also on course for its best week in 5 months with gains of over 2.5%. On the MCX, gold for June delivery settled higher at Rs. 47,760.
Reasons for gains in gold and silver are similar
Similar to gold, silver also drew on price direction from faltering bond yield and weaker dollar. 10-year bond yield were pushed down by a tad after the jobless claim in the US came in better than expected. Also, dollar index was seen trading near a 1-week low.
As for the non-farm payroll data which came in yesterday there was reported a deceleration in US job growth number with just 2,66,000 new jobs being added in the April month. This was even when the government continued with its fiscal support.
Silver Price Outlook- On the basis of Charts
After scaling to a high of Rs. 77,950 per kg in March 2020 when the world confronted market rout due to Covid19 , the grey-white metal corrected briefly and is now again taking off. The momentum indicator RSI or Relative Strength Index is at 63.5, suggesting bullish momentum. Also, the metal is trading higher than its 5, 20, 50, 100 and 200 days' SMA or simple moving averages and exponential moving average (EMA) on the daily chart.
Gold-silver ratio also reduced to 65 levels from a record high of 127 touched on March 20, which shall support the grey-white metal to scale further higher in price.
Again as is visible from the chart, silver has reversed sharply from the lower price and is depicting a pattern of higher highs and higher lows that suggest strength in price.