Silver experienced a significant decline, falling 6.74% to close at Rs 2,31,460, as the pressure on precious metals escalated in the context of persistent geopolitical tensions and a transition towards more hawkish central bank policies. Investors are reevaluating their perspectives following indications from major central banks that they are exercising caution regarding rate cuts, due to ongoing inflation risks and the uncertainty arising from the conflict in Iran.
The US Federal Reserve opted to keep rates steady, yet conveyed a resolute tone. Meanwhile, indications of potential tightening from the Bank of Japan and a hawkish position from the Bank of England contributed to a dampened sentiment. Stronger-than-expected US jobless claims data further underscored the resilience of the labor market, bolstering the argument for sustained elevated interest rates.
On the physical side, silver holdings in London vaults experienced a slight decline to 27,065 tonnes by the end of February, indicating a modest tightening in available supply. Nonetheless, this has had minimal impact in alleviating the overarching macroeconomic pressures stemming from interest rate expectations and the strength of the currency.
From a technical standpoint, the market is evidently experiencing new selling pressure, as open interest increases in conjunction with declining prices, suggesting the accumulation of bearish positions. Immediate support is identified at Rs 2,15,225, and a breach of this level may initiate additional declines toward Rs 1,98,985. On the upside, resistance is positioned at Rs 2,46,690, with a movement above this threshold potentially facilitating a recovery toward Rs 2,61,915.