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Friday, May 20, 2022

MCX Silver under short covering; Resistance seen at 61056

Technically Silver market is under short covering as market has witnessed drop in open interest by 9.07% to settled at 11892 while prices up 933 rupees.

Now MCX Silver is getting support at 59683 and below same could see a test of 58815 levels, and resistance is now likely to be seen at 61056, a move above could see prices testing 61561.

Silver yesterday settled up by 1.56% at 60550 as investors’ risk appetite weakened amid growing inflation worries and uncertainty about the impact of Evergrande’s debt crisis.

Investors fear that supply chain disruptions across the globe could keep inflation higher for a longer period than thought. Evergrande missed two deadlines to pay more than $180 million in interest to foreign investors who hold its dollar-denominated bonds.

In her Congressional testimony, Treasury Secretary Janet Yellen has warned of “catastrophic economic consequences” if the debt ceiling is not raised by October 18th.

The U.S. Federal Reserve may be close to meeting the inflation mandate set for raising interest rates, Philadelphia Fed Bank President Patrick Harker said, but it may be a year or longer before the central bank’s employment goal is met to allow for an actual rate increase.

After running high this year because of the pandemic, inflation is likely to come down closer to the Fed’s 2% target over the next couple of years, Harker said. U.S. consumer spending increased more than expected in August, but consumption was weaker than initially thought in the prior month, keeping intact expectations that economic growth slowed in the third quarter amid a resurgence in COVID-19 infections.

Trading Ideas:
–Silver trading range for the day is 58815-61561.
–Silver prices rose as investors’ risk appetite weakened amid growing inflation worries and uncertainty about the impact of Evergrande’s debt crisis.
–Investors fear that supply chain disruptions across the globe could keep inflation higher for a longer period than thought.
–Fed’s Harker says economy close to achieving inflation goal for rate hikes.

Courtesy: Kedia Commodities

Source: Comodity Online

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