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Silver drops on profit-taking after a 4-day rally

FXStreet (Mumbai) - Silver prices on Comex halted their four back-to-back sessions of gains and witnessed steep losses in Asia on Thursday mainly driven by a profit-taking slide after the recent upsurge.

Silver faced rejection near daily Pivot R2

Currently, silver trades -2.67% lower at 15.66, breaking below the 200-DMA crucial support located at 15.75. Silver bulls took a breather and eased today as markets viewed the recent rally as overdone and booked profits, repositioning ahead of the key event – FOMC minutes due later tonight.

While, the return of the Chinese traders after a week-long break failed to boost the demand for the metal and no catalyst was seen behind the decline in prices this session.

ON Wednesday, the precious metal rallied to fresh four-month highs at 16.10 after the mining giant Glencore announced that it closed the Eland platinum mine in South Africa.

While Morgan Stanley’s bullish stance on the commodity prices and on the miners, also triggered fresh buying interest around the white metal.

Analysts at Morgan Stanley noted, “Emerging markets and China in particular remain key to commodities demand. In the next few months we expect the perception around this demand to improve.” They also expect commodity prices to rise 19% by 2017, noting this “would be a sharp reversal from the experience in the last 18 months.”

Silver Technical Levels

The metal has an immediate resistance at 16.10 (Oct 7 High & R2), which the prices failed to take out yesterday. A break beyond the last, the next hurdle is placed at 16.20 (June 14 High & R3). Meanwhile, support stands at 15.58/59 (Oct 7 & Today’s Low) below which doors could open for 15.20 (10-DMA) levels.

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