Silver experienced a notable increase of 2.9%, closing at Rs 268,316, buoyed by a weaker dollar and a resurgence in safe-haven demand, driven by uncertainties surrounding U.S. trade policy and escalating tensions between Washington and Tehran. Markets responded to President Trump’s comments indicating that most nations are likely to uphold current trade agreements, despite the U.S. initiating a temporary 10% global import tariff, with talks in progress to potentially increase it to 15%.
Simultaneously, the Supreme Court’s decision to oppose previous reciprocal tariffs has introduced an additional dimension of policy uncertainty. On the monetary front, two Federal Reserve officials indicated a lack of urgency regarding interest rate adjustments, while markets persist in pricing in three 25-basis-point cuts this year. Comments from Atlanta Fed President Raphael Bostic regarding the potential for structurally higher unemployment as a result of AI adoption have significantly influenced rate expectations.
The physical market, at its core, continues to exhibit tightness. Silver inventories on the Shanghai Futures Exchange have fallen to approximately 350 tonnes, the lowest point since 2015, reflecting a significant decrease from the peak levels observed in 2021. London vault holdings experienced a slight decline of 0.3% month-on-month, totaling 27,729 tonnes.
From a technical perspective, the market is experiencing short covering, as evidenced by a decline in open interest of 11.52% to 4,507, accompanied by a significant increase in prices. Immediate support is identified at Rs 264,240, with subsequent levels at Rs 260,170. Resistance is positioned at Rs 271,440, and an upward movement beyond this threshold may lead to further increases toward Rs 274,570.