Silver settled up 1.53% at 42086 after Ukrainian separatists over the weekend voted in favor of self rule, which bolstered the metal's safe-haven appeal. Pro-Russian separatists claimed victory in a weekend referendum on self rule in the eastern Ukrainian city of Donetsk, which stirred concerns that the country is sliding closer to civil war. The vote has been condemned by Ukraine’s government and the West, which has threatened to hit Russia with fresh sanctions. Last week, the ECB left interest rates unchanged at 0.25%, though the euro dropped after ECB President Mario Draghi said the bank's governing council would feel comfortable with acting at its next meeting in June. By Monday, the single currency found support, which gave bullion room to climb. On Monday, ECB Vice President Vitor Constancio said medium-term inflation outlook will take high priority when monetary authorities consider implementing fresh policy measures. He said the ECB was considering a wide range of policy options but stopped short of indicating what the bank may decide. He stressed the ECB won't ignore the euro's strength but added that the exchange rate is not a policy target. Also according to the latest data from the CPM, fabrication demand for the grey metal is likely to increase 2.9% in 2014 to 890.7 million ounces that is a nine-year high. Furthermore, silver inventories in the total known ETFs climbed 0.76% week-on-week and almost 2% year-on-year. Technically market is under short covering as market has witnessed drop in open interest by -13.46% to settled at 13928 while prices up 633 rupee, now Silver is getting support at 41525 and below same could see a test of 40963 level, And resistance is now likely to be seen at 42517, a move above could see prices testing 42947.

Trading Ideas:

Silver trading range for the day is 40963-42947.

Silver gained after Ukrainian separatists over the weekend voted in favor of self rule, which bolstered the metal's safe-haven appeal.

Last week, Draghi said the bank's governing council would feel comfortable with acting at its next meeting in June.

Silver inventories in the total known ETFs climbed 0.76% week-on-week and almost 2% year-on-year.