Silver revived unexpectedly despite reserve requirement hike by the Chinese central bank but the better than expected US releases led the metal to grow with the equities. Futures in the Comex and Mcx were settled by gaining 1.94 and 1.14 percent respectively.
The dollar index declined against the Euro and other major currencies after China surprisingly tightened monetary policy by hiking reserve rate to drain cash from the economy.
Global equities settled at a positive tune. A pair of US economic releases bolstered equities as well as hopes that the US economy has not yet slipped back into recession.
The I-share silver holdings slashed by 2.08% to 9707.98 tons from 9914.21 tons as on 13th June.
Outlook:
At the Globex platform silver is seen quoting up by $0.184 at $35.595. As discussed in Gold’s outlook, the Asian equities are trading mostly at a positive note except the Chinese stock which is paring gains after their central bank hiked the reserve ratio to drain the cash fro the economy.
Yesterday the EU officials failed to reach any permanent solution to resolve the Greek debt which is leading the Euro to depreciate. Besides, Euro treasuries yield fell increasing the demand for a relatively safer investment.
The dollar is therefore likely to remain strong for the day as reports in the evening are likely to show more capital is entering in to the US economy in the form of Net long term TIC flows. This may indicate that the US securities are competitive to others. Hence dollar may get boost from there.
Besides, industrial production and capacity utilization is also expected to improve which are the ancillary factors for the dollar to gain strength against the majors. Hence, silver may pare the gain in the evening triggered by the data releases. So, it is recommended to be long for a shorter upside gain, mostly tending to lower side till evening.
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