Silver prices experienced a significant correction in the last session, closing down by 3.17% at Rs 250,605. This decline was driven by investors taking profits following a robust rally, alongside a notable decrease in ETF holdings, which fell by over 3.2 million ounces for the third consecutive day. The decline was underscored by mixed signals from the US macroeconomic landscape, as ADP data indicated a modest increase in private payrolls of only 41,000 in December, falling short of expectations, while orders for US manufactured goods experienced a month-on-month decrease of 1.3%, reflecting a lack of momentum in the industrial outlook. Anticipations regarding policy,
However, it is essential to maintain a supportive stance. Comments from Fed Governor Stephen Miran indicating that aggressive rate cuts may be necessary to maintain economic momentum have bolstered market expectations for a minimum of two rate reductions this year.
Longer-term sentiment continues to be positive, as HSBC has significantly increased its silver price forecasts for 2026 and 2027, driven by expectations of a weaker US dollar and slight supply-demand imbalances, although it acknowledges that prices may experience volatility in the short term. Structural supply risks continue to be a concern as Chinese silver stockpiles have decreased to their lowest levels in ten years, attributed to unprecedented export levels. Meanwhile, liquidity in the London market remains constrained, even with the increase in vault holdings reported by the LBMA.
From a technical perspective, the market is experiencing renewed selling pressure, as evidenced by a 5.49% increase in open interest to 12,305 contracts, coupled with a significant price decline of Rs 8,206. Silver currently exhibits immediate support at Rs 244,770; a breach of this level would reveal further downside potential at Rs 238,940. Conversely, resistance is identified at Rs 258,060, followed by Rs 265,520, should a sustained recovery materialize.