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Here's how to trade Silver on February 27; check support, target, and more
Dips towards the key support at $84 are likely to be well supported as geopolitical concerns continue to linger, said Praveen Singh, head currencies and commodities at Mirae Asset
Silver prices may remain range bound. Image: Bloomberg
On February 26, the white metal closed with a loss of around 1.09 per cent at $88.29 as the US Dollar strengthened slightly.
Spot silver surged 9.3 per cent in the week ending Feb. 20 as the $70 support held fast. The metal is up by around 25 per cent year-to-date (YTD).
Geopolitics watch:
The much-awaited third round of US-Iran talks concluded without a deal in Geneva on Thursday. Intense indirect talks that were held in two sessions and lasted for around six hours, made good progress on the deal front, according to Iran’s Foreign Minister Araghchi, who told that technical talks with the International Atomic Energy Agency will begin Monday in Vienna, wherein technical expert reviews will aim to resolve technical issues within a specific framework. Next round of US-Iran talks could happen as soon as next week. There were no immediate comments from the US side, though.
Meanwhile, geopolitical tensions remain elevated as the US has amassed the largest military buildup since 2003 in the second Iraq war. US Senate Majority Leader John Thune said the goal should be regime change if the US takes military action against Iran.
In an event that US Secretary Rubio called ‘unusual’, Cuban border guards shot dead four people aboard a Florida-registered vessel it intercepted off its coast on Wednesday. The Cuban interior ministry alleged that the US vessel had fired first. The development is of importance in the light of the strained US-Cuba relationship and the US removing the Venezuelan President Maduro in January.
Sebi changes gold and silver valuation model for mutual funds:
On February 26, as reported by Reuters, India's markets regulator the Securities and Exchange Board of India (Sebi) directed mutual funds to use domestic stock exchange spot prices to value their physical gold and silver holdings from April 1, 2026. Mutual funds may now use polled spot prices from recognized stock exchanges that settle physically delivered gold and silver derivatives contracts, ensuring that valuations reflect domestic market conditions. The decision will do away with the LBMA prices as the benchmark.
The news agency further reported that the regulator has also permitted mutual funds to allocate a "residual portion" of equity schemes to gold and silver instruments and allow hybrid schemes to invest in gold and silver exchange traded funds (ETF).
Total known silver ETF holdings fell to 815.05 MOz on February 23, the lowest since November 13, before rebounding strongly to 833.89 MOz on February 25. However, silver ETF holdings, unlike gold ETFs, are down nearly 3.44 per cent YTD as investors continue to book profits. Overall, silver ETF holdings are still at a nearly 4-year high.
Eligible COMEX silver inventory has fallen to 275.56 MOz, a year low. As of February 25, registered COMEX silver inventory s down 57 per cent from the record high of 201 MOz to 86.28 MOz presently.
Silver lease rate:
One-month London lease rate at 1.57 per cent has eased considerably from over 6 per cent seen at the beginning of the month, it remains well-above the historical 0.3 per cent-0.5 per cent range.
Concerns about Mexico’s silver supplies:
Eruption of violence in Mexico, the world's largest silver producer, following the killing of Nemesio "El Mencho" Oseguera Cervantes, the leader of the Jalisco New Generation Cartel (CJNG), on February 22, has led to a power vacuum, which is now leading to a surge in kidnappings, extortion, hijackings, and targeted killings. Mexico's silver mines, including those in Jalisco, Michoacán, Zacatecas, and Durango, could be at risk due to the cartel turmoil.
Upcoming data:
Today’s US data docket includes PPI (January).
This week is light on data, however next week will have a deluge of crucial data like ISM manufacturing (March 2), ISM services (March 4), Feb. ADP (March 4), ISM services (March 4), retail sales (March 5) and Feb. nonfarm payroll (March 6).
Outlook:
Following the US Supreme Court decision and the US President Trump imposing 10 per cent tariffs under section 232, net US global tariffs have declined from 13.2 per cent to 10.1 per cent. It is a positive development for the metal.
ETF holdings are still showing net outflow YTD, which is negative for silver.
Concerns about Mexico’s silver supply are not visible yet.
Tight inventory is China is surely a positive factor for the metal.
Dips towards the key support at $84 are likely to be well supported as geopolitical concerns continue to linger. The metal needs to clear the stiff resistance around $92 to make a headway towards the next crucial resistance at $96. Overall, the metal is likely to trade between $84 and $92 ahead of the key US job data next week and continuing geopolitical worries. Next major support is seen around $80.
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(Disclaimer: This article is by Praveen Singh, head currencies and commodities at Mirae Asset Sharekhan. Views expressed are his own.)
 "Here's how to trade Silver on February 27; check support, target, and more")
