Silver declined by 0.2% to close at Rs 243,274, as market participants exercised caution in light of the ongoing diplomatic discussions between the US and Iran in Islamabad. The recent two-week ceasefire between the two nations has alleviated concerns regarding energy-driven inflation, particularly following a significant decline in oil prices.
Nevertheless, the circumstances continue to be precarious, as fresh Israeli airstrikes in Lebanon and ongoing disturbances in the Strait of Hormuz introduce ambiguity regarding the ceasefire. The recent US inflation data has left investors in a state of heightened alertness. In March, consumer prices experienced an increase of 0.9%, resulting in an annual inflation rate of 3.3%, marking the highest level since May 2024. Core inflation, however, exhibited a relatively contained rate of 0.2% on a monthly basis.
The Federal Reserve’s favored PCE index registered at 2.8% for February and is anticipated to rise, maintaining a cautious stance from the central bank. Current market assessments indicate a modest 31% likelihood of a rate cut occurring by December. From a supply perspective, silver holdings in London vaults increased by 1.6% to 27,487 tonnes by the end of March, suggesting a comfortable availability in the physical market.
From a technical perspective, the market is experiencing new selling pressure, as evidenced by a 0.66% increase in open interest to 5,742, indicating the establishment of new short positions. Immediate support is identified at Rs 240,200, with a breach below expected to challenge Rs 237,120. On the upside, resistance is positioned at Rs 245,705, and a breach of this level may propel prices toward Rs 248,130.