Silver experienced a decline of 4.63%, closing at Rs 228,783, as reduced liquidity during the holiday period in China and Hong Kong heightened market volatility. Chinese involvement had driven a robust speculative surge in January; however, the subsequent sharp downturn and regulatory measures aimed at mitigating excessive risk have dampened momentum. As U.S. markets resume activity, focus has turned to the recent meeting minutes from the Federal Reserve and the forthcoming core PCE data, which are anticipated to provide greater clarity on interest rate trajectories.
In January, U.S. inflation moderated to 2.4%, marking its lowest level since May; however, core prices experienced a month-on-month increase of 0.3%. Robust employment figures have moderated anticipations for a prompt reduction in interest rates, leading markets to increasingly favor a timeline extending to July. Policymakers, such as Dallas Fed President Lorie Logan and Cleveland Fed President Beth Hammack, have expressed a cautious stance, indicating that interest rates may remain elevated for an extended period.
Meanwhile, President Donald Trump suggested that negotiations with Iran could wrap up within a month, introducing a geopolitical aspect to market sentiment. On the supply side, physical tightness continues to be apparent. Inventories at the Shanghai Futures Exchange have declined to levels approaching a decade low, whereas holdings in London vaults have experienced a slight decrease as the month concluded.
Silver is currently experiencing renewed selling pressure, as evidenced by a 2.71% increase in open interest. Immediate support is identified at Rs 224,000, with additional downside potential toward Rs 219,215. Resistance is positioned at Rs 235,645, with a potential rebound that may challenge Rs 242,505.