Silver prices fell by 1.15%, closing at Rs 241,824, as investor sentiment turned cautious due to stalled US-Iran peace negotiations and an impending calendar packed with global economic data releases and central bank meetings. The persistent geopolitical uncertainty, particularly in the Strait of Hormuz, has kept crude oil prices elevated, intensifying concerns regarding inflation. This development has, consequently, strengthened expectations that central banks may maintain a tighter monetary policy. While the Federal Reserve is largely expected to maintain its current interest rates, markets continue to exhibit sensitivity to any indications of sustained elevated rates, which typically exert pressure on non-yielding assets like silver.
Macroeconomic sentiment remains fragile, as indicated by the University of Michigan’s Consumer Sentiment Index, which has been slightly adjusted upward to 49.8 in April. Nevertheless, this figure still represents a historic low, highlighting the adverse impact of geopolitical tensions on consumer confidence. Meanwhile, CME Group’s decision to reduce margins on COMEX silver futures to 11% from 14% may bolster trading participation and liquidity.
On the demand front, China has provided substantial support to the silver market. In March, imports surged to an extraordinary 836 metric tonnes, nearly tripling the decade average. This increase was driven by strong retail purchasing and stockpiling activities in the photovoltaic sector, as stakeholders prepared for impending policy changes. Increased domestic premiums in China have triggered global arbitrage flows, with Hong Kong acting as a vital transit hub. Additionally, London vault holdings rose by 1.6% to 27,487 tonnes, indicating steady institutional demand.
From a technical perspective, the market is undergoing long liquidation, as demonstrated by a notable decrease in open interest, which has fallen by 25.53% to 3,847, signaling the departure of bullish positions. Silver faces immediate support at Rs 239,555, with further downside potential reaching Rs 237,290. On the upside, resistance is noted at Rs 244,780, and a breakout above this threshold could drive prices toward Rs 247,740.