Silver prices increased by 0.23% to Rs 162,470 as investors turned to safe-haven assets in response to persistent global uncertainties. Anticipations regarding forthcoming Federal Reserve rate reductions bolstered sentiment, underpinned by indications of a softening labor market in the United States. Concerns on the supply side have also bolstered support, especially with the peak wedding season in India currently taking place and apprehensions regarding possible US tariffs on silver.
Last week, the US Department of Interior included silver, copper, and metallurgical coal in its “critical minerals” list—an important designation that may facilitate Section 232 investigations and potential trade restrictions, akin to previous actions concerning copper. The overarching macroeconomic environment continued to exhibit volatility, highlighted by President Donald Trump’s enactment of a funding bill that concluded the unprecedented 43-day government shutdown. The bill’s provisional status, coupled with a new deadline of January 30, has sustained a heightened level of political uncertainty.
Fed Governor Stephen Miran’s advocacy for a more substantial half-point rate cut in light of declining inflation and increasing unemployment has provided additional support for precious metals. In October, silver stored in London vaults experienced a 6.8% increase, reaching 26,255 tonnes, which is valued at $41.3 billion. This rise can be attributed to inflows from the US and China that alleviated a liquidity crunch in the London OTC market.
Despite a degree of alleviation, borrowing rates continue to be historically high. Short covering is apparent, as indicated by a 1.05% decrease in open interest to 13,488. Support is established at Rs 160, Rs 170, and Rs 157,870, whereas resistance is identified at Rs 165,295, with additional upside potential extending toward Rs 168,120.