Silver prices experienced a decline of -1.85%, concluding at Rs 2,37,345. This downturn is attributed to heightened inflation concerns associated with the intensifying tensions between the US and Iran, as well as ongoing disruptions in the Strait of Hormuz. Heightened crude oil prices have bolstered anticipations that central banks could sustain a more restrictive monetary policy for an extended period. Although precious metals generally thrive in inflationary conditions, the anticipation of rising interest rates diminishes the attractiveness of non-yielding assets such as silver.
Markets are currently monitoring the US Federal Reserve’s policy outlook, anticipating a pause while adopting a more hawkish tone. On the macro front, US labour data indicated moderate stability, with private-sector job additions averaging 39,250 per week in early April, slightly lower than the previous period, suggesting a gradual cooling in hiring momentum. At the same time, the demand for silver in China continues to serve as a significant supportive element.
Imports reached an unprecedented 836 metric tonnes in March, nearly tripling the historical average, propelled by robust retail investment demand and proactive stockpiling by the photovoltaic sector in anticipation of forthcoming policy changes. The strong demand has propelled domestic Chinese silver prices beyond global benchmarks, fostering inflows driven by arbitrage opportunities. Furthermore, silver holdings in London vaults rose by 1.6% to 27,487 tonnes, suggesting sufficient global inventory levels in the face of robust regional demand.
From a technical perspective, the market is experiencing long liquidation, as evidenced by a substantial decline in open interest of -70.9% to 2,251, which reflects a notable unwinding of current long positions. Silver is presently encountering support at Rs 2,32,620, with a breach beneath this level likely to challenge the Rs 2,27,890 mark. On the upside, resistance is observed at Rs 2,41,665, and a movement above this threshold could propel prices toward the Rs 2,45,980 levels.