MCX Silver under short covering; Support seen at 39886

Technically Silver market is under short covering as market has witnessed drop in open interest by 11.07% to settled at 10078 while prices up 48 rupees.

Now MCX Silver is getting support at 39886 and below same could see a test of 39718 level, And resistance is now likely to be seen at 40291, a move above could see prices testing 40528.

Silver on MCX settled up 0.12% at 40054 as traders await a batch of key U.S. economic data due later this week. Investor sentiment improved this week after U.S. President Donald Trump raised the prospect of a trade deal with China.

The US dollar extended its losses on Monday as risk appetite improved after US President Donald Trump decided to extend a March 1 deadline for additional tariffs on Chinese goods, suggesting trade negotiations between the two countries have made significant progress.

US President said the two sides “are going to have a signing summit” and that they are “getting very close,” although he cautioned it is possible that the deal “might not happen at all.” The president also announced a delay in tariffs on Chinese goods over the weekend, citing “substantial progress in trade talks with China.”

The news is a double-edged sword for gold: while bigger appetite in riskier assets supports the currencies of emerging countries whose central banks are among the biggest buyers of the metal, the outperformance of ‘riskier’ assets such as equities could prompt some outflows from safer ones such as gold and bonds.

On the data front, traders will be closely monitoring the U.S. fourth-quarter GDP, which is set to be released on Thursday. Federal Reserve Chairman Jerome Powell’s two-day testimony to Congress on the economic outlook and monetary policy, which begins Wednesday, is also expected to be in focus.

Trading Ideas:
–Silver trading range for the day is 39718-40528.
–Silver prices gained as traders await a batch of key U.S. economic data due later this week.
–Investor sentiment improved this week after U.S. President Donald Trump raised the prospect of a trade deal with China.
–On the data front, traders will be closely monitoring the U.S. fourth-quarter GDP, which is set to be released on Thursday.

Courtesy: Kedia Commodities