Silver prices experienced a decline of 0.4%, settling at Rs 2,51,742, as markets navigated the interplay between easing geopolitical tensions and persistent economic and supply concerns. Advancements in US-Iran peace negotiations, especially concerning the extension of the ceasefire, have led to a decline in safe-haven demand. Nonetheless, ambiguity persists following the United States’ indication of intentions to station more military personnel in the area.
A depreciating dollar, lingering around six-week lows, provided a degree of support, while the Federal Reserve’s measured approach has alleviated concerns regarding substantial rate increases. In light of these supportive factors, silver has experienced a correction of 15% since the onset of the Iran conflict, primarily driven by the influence of elevated interest rates on non-yielding assets.
On the supply side, apprehensions persist markedly. Industry estimates suggest a sixth consecutive year of structural deficit, with approximately 762 million ounces depleted from global inventories since 2021. The ongoing deficit is increasing the likelihood of a possible liquidity crunch. Concurrently, industrial demand is anticipated to experience a modest decline, with forecasts indicating a 3% reduction to approximately 640 million ounces by 2026.
From a technical standpoint, the market is experiencing new selling pressure, as evidenced by a 4.54% increase in open interest. Silver currently finds itself with immediate support at Rs 2,48,435. A breach of this level may lead to a decline in prices toward Rs 2,45,130. On the upside, resistance is positioned at Rs 2,55,330, with a possible advance toward Rs 2,58,920 should this level be surpassed.