August 17, 2009 / 1:11 PM / 10 years ago

OUTLOOK-India silver futures seen lower on strong dollar

MUMBAI, Aug 17 (Reuters) - India silver futures may trade lower this month on expectations of a strong dollar overseas, analysts said.

But hopes of domestic festive demand could cap the downside, they added.

“There could be some more correction in silver this month on strong greenback,” said Harish Galipelli, head of research, JRG Wealth Management in Kochi. “Silver may fall till 22,500 rupees locally.”

“Silver is looking a little weak on growing risk aversion and strong dollar index,” said Gnanasekar Thiagarajan, director, Commtrendz Research.

The most-traded September contract on the Multi Commodity Exchange fell by 2.32 percent to 23,165 rupees per kg at 6:30 p.m.

The contract had gained 2.5 percent in the previous month, when a weak dollar and rising crude oil spurred buying.

“Silver should ideally test 22,700 (rupees) in the days to come,” said Thiagarajan. (Reporting by Siddesh Mayenkar; Editing by Harish Nambiar)

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