Silver experienced a significant increase in the last session, closing up by 5.14% at Rs 258,811, driven by elevated geopolitical tensions that enhanced demand for safe-haven assets. The recent military intervention by the US in Venezuela, coupled with the apprehension of President Nicolas Maduro, has introduced a new layer of uncertainty into global markets.
Additionally, reports indicating President Donald Trump’s threats of a subsequent strike have further heightened risk aversion among investors. Sentiment was bolstered by disappointing US manufacturing data and accommodating comments from Federal Reserve officials, while markets persist in pricing an over 80% likelihood of a rate hold at the forthcoming Fed meeting.
Fundamentally, silver remains bolstered by constricting supply dynamics and strong demand stemming from industrial usage and investment activities. Chinese stockpiles have reached their lowest levels in ten years, subsequent to record exports surpassing 660 tonnes in October, primarily directed to London to alleviate a local market squeeze. Despite unprecedented inflows into UK vaults, liquidity in the London silver market continues to be constrained, with borrowing costs remaining high.
From a technical standpoint, the market is experiencing short covering, as evidenced by a 6.22% decrease in open interest to 11,629 contracts, coinciding with a significant price increase of Rs 12,656. Silver currently has support at Rs 250,690; a breach below this level could lead to a decline towards Rs 242,575. On the upside, resistance is observed at Rs 263,120, and a sustained movement above this threshold could initiate a further rally towards Rs 267,435.