Silver experienced a decline of 1.83%, closing at Rs 239,891, influenced by a stronger U.S. dollar in anticipation of crucial economic data that may impact the Federal Reserve’s policy direction. Recent remarks from Federal Reserve officials underscored a prudent approach. Chicago Fed President Austan Goolsbee indicated that rate cuts could be on the table, contingent upon additional moderation in services inflation.
In the interim, Dallas Fed President Lorie Logan and Cleveland Fed President Beth Hammack indicated that interest rates could remain elevated for an extended period unless there is evident deterioration in the labor market. Despite a deceleration in U.S. inflation to 2.4% in January—marking its lowest point since May—robust employment figures have elevated anticipations for the inaugural rate reduction to July, while market participants continue to factor in approximately two cuts within the year.
On the geopolitical front, President Donald Trump suggested that negotiations with Iran regarding its nuclear program might wrap up within a month, thereby alleviating some immediate demand for safe-haven assets. Notwithstanding the decline in prices, the fundamentals of the physical market continue to exhibit tight conditions. Silver inventories on the Shanghai Futures Exchange have decreased to approximately 350 tonnes, approaching decade lows, indicative of ongoing drawdowns. At the conclusion of January, London vault holdings registered at 27,729 tonnes, reflecting a minor decline compared to the preceding month.
From a technical perspective, the market is experiencing long liquidation, evidenced by a 3.83% decrease in open interest and a price decline of Rs 4,469. Support is identified at Rs 236,250, with additional potential decline towards Rs 232,610. Resistance is positioned at Rs 242,490, while a potential recovery may challenge the level of Rs 245,090.