Silver ends losing streak, rises over 3%

Possible for white metal to touch Rs 59,000 a kg by month-end, says trade body

Silver ended its nine-day losing streak and closed higher today in Mumbai’s spot market. It closed on the positive side by over 3 per cent at Rs 56,085 per kilogram from its previous close of Rs 54,305 per kilogram. Since April 28, silver had plummeted more than Rs 18,000 or 25 per cent on profit booking as it had witnessed a sharp rally earlier. It touched an all-time high of Rs 75,020 per kilogram on April 25.

Demand for the metal has emerged at lower levels, which has caused the precious metal to bounce back.

“Rs 50,000 to Rs 52,000 (per kilogram) is a good level to buy silver,” said Prithviraj Kothari, president, Bombay Bullion Association.

By the end of this month, it is possible for silver to touch Rs 59,000 per kilogram, Kothari said.

Profit booking at higher levels had caused silver to see a steep drop. On the Chicago Mercantile Exchange (CME), the sharp fall in prices was attributed to heavy profit booking in silver when the white metal reached an all-time high of $49.8 in the COMEX market. CME said it would raise margins from May 9 to $21,600 per future contract from $16,200 per contract.

Also, maintenance charges were raised to $14,000 from $12,000, which would be introduced in steps. Margins are the fund that exchanges keep to allow a trader to trade, and they are raised to control volatility in a particular commodity.