Here's how to trade Silver On January 3; Check suppport, target and more

Silver trading strategy: Stable US yields may help Silver test the resistance around $30.20 in ultra-short term, though buying the dips is advisable over chasing the rally

Silver: Follows gold sharply higher

  Performance

  Spot silver ignored the weakness in the base metals complex and rode on the coattails of gold to rise sharply on January 2, the first trading day of the year.

  Spot silver traded in the range of $28.88-$29.60 during the day. It was trading at $29.45, up nearly 2 per cent, at the time of the MCX closing.

  The MCX March Silver contract was at Rs 89,025 (LTP), up 1.65 per cent on the day.

  Spot gold rallied on fund flows and disappointing manufacturing PMIs out of China, the Euro-zone and the UK. Initial dip in the US yields also helped the metal.

 

  The white metal posted an impressive performance last year as it rallied over 20 per cent in 2024.

  ETF

  Total known silver global ETF holdings stood at 716.189 Moz as on January 1, the highest level since December 24. Silver ETF holdings were up nearly 2 per cent on yearly basis in 2024.

  Data roundup

  China's Caixin manufacturing PMI (December) disappointed as the Index at 50.50 trailed the estimate of 51.70, which is the slowest pace of expansion since October. China's stimulus does not seem to be working in the expected manner at least for the manufacturing sector. It is to be noted that even NBS manufacturing PMI data came in at 50.1 as against the forecast of 50.20, the slowest pace since October, though NBS services PMI at 52.20 surpassed the expectations of 50.20.  Also read: Gold-Silver PriceToday

  The US data, released on Thursday, were largely positive as initial jobless claims fell to 211K (forecast 221K) from 219K, continuing claims fell from 1896K to 1844K (forecast 1890K), S&P global US manufacturing improved to 49.4 (forecast 48.30) in the December final reading from 48.30, though construction spending remained unchanged in November; thus, trailing the forecast of +0.3 per cent.

  The UK's manufacturing PMI (December final) at 47 fell short of the estimate of 47.30. The Euro-zone's manufacturing PMI (December final) came in at 45.1 Vs the estimate of 45.20.

  Upcoming data

  Today's US ISM manufacturing will be the key data on traders' radar. Apart from this data, traders will monitor Germany's employment data (December) also.

  US Dollar and yields

  The US Dollar Index, despite subdued US yields rose to 109.53-- a fresh cycle high as it hit the highest level since November 10, 2022.The ten-year US yields at 4.5650 were down half a bps, whereas the 2-year yields as the year-yields at 4.24 per cent was also a touch firmer.

  Outlook

  Silver is caught between weakening base metals and positive outlook for gold. Weaker-than-expected PMIs out of China and Europe are somewhat negative for the metal. However, firmer gold is positive for the metal.

  The metal faces a strong resistance around $29.80.

  Stable US yields may help the metal to test the resistance around $30.20 in ultra-short term, though buying the dips is advisable over chasing the rally.

  Silver support is at 29 (Rs 87,600)/$28.75 (Rs 86,900). Resistance is at $29.72 (Rs 89,800) -$29.80 (Rs 90,000)/ $30 (Rs 90,700)/$30.20 (Rs 91,300).

  (Disclaimer: This article is by Praveen Singh, associate VP, fundamental currencies and commodities at Mirae Asset Sharekhan. Views expressed are his own.)