Silver increased by 0.31% yesterday, closing at Rs 268,850, showing a slight recovery following a significant selloff as fresh buying interest surfaced. The market remains under the influence of diminished inventories, as Goldman Sachs cautions that “squeeze-like conditions” are amplifying rallies during periods of tight supply, only for prices to experience a significant reversal when the pressure subsides. In a move that reinforces optimistic market sentiment, President Donald Trump announced the establishment of a $12 billion reserve of critical minerals, referred to as Project Vault, with the objective of protecting U.S. industries and diminishing reliance on China.
This initiative, partially financed by the Ex-Im Bank and private enterprises, aims to accumulate rare earth elements and critical industrial metals vital for automobiles, technology, and aviation. Structural supply deficits, particularly in China, persist in bolstering silver. A mere 44 companies currently possess the authorization to export the metal, with last year’s exports reaching 5,100 metric tons, marking the highest level since 2008.
Chinese stockpiles have recently declined to their lowest level in a decade, leading to substantial shipments to London. In the interim, silver stocks held in London vaults experienced a modest increase, reaching 27,818 tonnes, with a valuation of $64.4 billion. Citi has increased its 0–3 month silver forecast to $150 per ounce from $100, indicating persistent robust demand.
From a technical perspective, the market is experiencing new buying activity, as evidenced by a 0.43% increase in open interest, now standing at 6,316. Support is identified at Rs 259,160, with a further examination at Rs 249,475 if this level is breached, while resistance is positioned at Rs 284,960, and a breakthrough could drive prices towards Rs 301,075.