India silver demand low, prices seen aiming at highs

By Ruchira Singh

MUMBAI (Reuters) - India's silver demand is expected to remain slack this month, with prices seen firm and targeting new highs as more funds in Western markets move to precious metals boosting prices, analysts and traders said.

Silver futures on the Multi Commodity Exchange of India Ltd struck a new high of 26,271 rupees per kg on Tuesday, and analysts said it had the appetite for more highs, albeit with some likely corrections.

"The trend is quite biased for further gains, but this does not reduce the chances of heavy slides as many indicators are hovering near the overbought zones," said Pradeep Unni, assistant vice president at Vision Commodities Services DMCC.

Vamsi Krishna Kona, senior analyst, Karvy Comtrade Ltd, said the May silver on MCX could rise to 29,500 rupees at the end of this month or at the beginning of April.

"We are expecting some corrections before the market rallies again," Kona said. "This is because in the last two month or so, prices have risen steadily without any correction."

Kona said the dip could take May silver to 24,400 rupees.

TRADERS UNHAPPY