Silver prices experienced a significant rebound, increasing by 13.44% to close at Rs 268,015, primarily fueled by intense short covering after a pronounced two-day selloff. Market participants continued to evaluate the ramifications of Kevin Warsh’s nomination as the next U.S. Federal Reserve chair, while increased geopolitical and macroeconomic uncertainty, concerns over currency debasement, and a structurally tight silver market contributed to bullish sentiment.
Investor interest has heightened, especially among Chinese speculators, given the persistent elevation of supply risks. Fundamentals indicate a contraction in availability. Chinese stockpiles have declined to their lowest point in ten years, a development attributed to unprecedented exports that redirected substantial quantities to London in order to alleviate previous shortages.
China exported approximately 5,100 tonnes last year; however, the introduction of new export licensing regulations, which restrict the number of exporters to only 44 firms, has generated apprehensions regarding future shipments. In December, London vault holdings experienced an increase of 2.3%; however, the persistence of elevated borrowing costs indicates continued liquidity stress. Citi has raised its short-term silver price forecast to $150 per ounce, reinforcing a bullish outlook relative to gold, driven by ongoing supply deficits and increasing investment demand.
From a technical perspective, the market is experiencing significant short covering, evidenced by a 6.6% decline in open interest, coinciding with a notable price increase of Rs 31,754. Silver currently finds itself with immediate support at Rs 249,820; a breach of this level may lead to a test of Rs 231,620. On the upside, resistance is observed at Rs 282,110, and a sustained movement above this threshold could drive prices toward Rs 296,200.