Silver prices declined by 0.54% to close at Rs 223,941, as persistent tensions in the Middle East maintained a state of unease in the markets. Despite the U.S. postponing intended military actions against Iran, attributing the decision to constructive dialogues, Tehran has rejected this assertion, leaving a significant degree of uncertainty in the situation. Reports indicating potential involvement from Saudi Arabia and the UAE, coupled with ongoing Israeli military objectives, have sustained heightened geopolitical risks.
Notwithstanding this, silver remains close to its lowest levels since December, burdened by escalating energy prices and ongoing inflation apprehensions. The wider macroeconomic landscape is similarly constraining potential gains. As the timeline for anticipated Federal Reserve rate cuts extends, markets are adjusting to the likelihood of an extended phase of tighter monetary policy on a global scale. Federal Reserve officials have underscored the importance of a flexible strategy, highlighting that an extended conflict could elevate inflation levels while simultaneously undermining the labor market, thereby complicating policy-making decisions. At the end of February, silver holdings in London vaults amounted to 27,065 tonnes, representing a decrease of 2.4% from the preceding month, indicative of a slight drawdown.
From a technical standpoint, the market is experiencing long liquidation, as evidenced by a 1.81% decline in open interest to 5,974. Immediate support is identified at Rs 215,850, with a breach below this level potentially leading to a decline toward Rs 207,750. On the upside, resistance is positioned at Rs 229,760, and a movement above this threshold could drive prices toward Rs 235,570.