MUMBAI: Silver futures may extend losses for a second month on expectations the dollar would appreciate and on lack of physical demand in the
domestic markets after the doubling of import tax, analysts said. The most-active September silver contract closed 0.6 per cent higher at 21,398 rupees per kg. It had lost 10 per cent last month.
"We have a bearish view for precious metals this month on expectations of dollar appreciation on gloomy economic outlook," said Debjyoti Chatterjee, associate vice-president with ADMISI Commodities.
"There could be follow-through selling in silver and is looking much weaker than gold," said Aurobinda Prasad, deputy manager-research with Karvy Comtrade in Hyderabad.
Further, curtailed domestic demand after the import tax could put pressure prices further, added another analyst with a local brokerage.
Finance Minister Pranab Mukherjee raised the import duty on silver to 1,000 rupees ($20.7) per kg from 500 rupees earlier in the budget for 2009/10 last week.
Selling is recommended at 21,400 rupees, with a target of 20,000 rupees and with a stop loss of 21,850 rupees, said Prasad.
The breakdown in silver happened on July 10, and now it would decline slowly and steadily, said Amrut Deshmukh, a senior technical analyst, Way 2 Wealth Securities.
