Silver experienced a notable increase of 4.15%, concluding at Rs 2,63,018. This rise was propelled by a resurgence in safe-haven demand, following disappointing U.S. retail sales figures that underscored a deceleration in consumer activity. The underwhelming figures, coupled with diminishing confidence in dollar-denominated assets due to policy ambiguity in Washington, prompted investors to shift their focus towards precious metals.
Current market expectations indicate approximately 60 basis points of easing from the Federal Reserve by the end of the year. Nonetheless, sentiment continues to be cautious in light of the significant fluctuations observed in the metals market over the preceding fortnight, characterized by a speculative surge followed by a pronounced correction.
The labour market data presented a nuanced scenario. The U.S. economy is projected to have created 130,000 jobs in January, recovering from December’s adjusted figure of 48,000, as the unemployment rate decreased to 4.3%. Nonetheless, apprehensions regarding the overall economic momentum persist, providing support for bullion. On the supply side, physical tightness continues to be a significant theme. Silver inventories on the Shanghai Futures Exchange have declined to levels not seen in nearly a decade, falling over 88% from their peak in 2021. In January, London vault holdings experienced a slight decline.
The rally was fundamentally underpinned by short covering, evidenced by a 0.78% decline in open interest. Immediate support is identified at Rs 2,57,515, with subsequent support at Rs 2,52,010. Resistance is positioned at Rs 2,68,950, and a sustained advance beyond this threshold may aim for Rs 2,74,880.