Silver concluded the trading session down by 9.31% at Rs 243,815, as diminishing geopolitical tensions and a sense of optimism regarding forthcoming US–Iran discussions prompted significant profit-taking following the recent rally. Softer macro cues also weighed on sentiment, as US initial jobless claims surged to 231,000, significantly exceeding expectations, thereby raising new concerns regarding the pace of economic momentum. In Europe, the ECB maintained its interest rates, expressing assurance that inflation will align with its 2% target, thereby diminishing immediate demand for safe-haven assets. Notwithstanding the significant decline, the overarching fundamentals for silver continue to exhibit support.
Analysts persist in highlighting constrained supply conditions, with Goldman Sachs cautioning that diminished inventories have engendered squeeze-like dynamics, resulting in the potential for prices to fluctuate sharply in either direction. Structural deficits in the global silver market, coupled with consistent investment inflows—particularly from Chinese participants—have supported prices in recent months.
Concerns remain regarding China’s new export licensing regulations, which may limit future shipments, despite exports reaching multi-year highs in the previous year. Inventory trends exhibit a mixed performance. At the conclusion of December, silver holdings in London vaults experienced a month-on-month increase of 2.3%, whereas stocks in Chinese warehouses have declined to their lowest levels in almost ten years, underscoring a regional scarcity.
From a technical perspective, the market is experiencing long liquidation, evidenced by a 2.67% decline in open interest. Immediate support is identified at Rs 230,175, beneath which prices may decline toward Rs 216,540. Resistance is positioned at Rs 257,770, and a breach of that threshold may pave the way toward Rs 271,730.