Silver prices experienced an upward movement, concluding with an increase of 1.29% at Rs 244,636, bolstered by a weaker dollar and ongoing geopolitical instability in the Middle East. Despite a recovery in prices during the latest session, the overarching trend continues to exhibit caution, as the metal is poised for a weekly decline of nearly 7% due to sluggish advancements in peace negotiations. The persistent closure of the Strait of Hormuz has sustained elevated energy prices, exacerbating inflationary pressures in global markets.
This has resulted in a mixed environment for silver—geopolitical risks generally bolster safe-haven demand, whereas increasing inflation and the potential for tighter monetary policy tend to exert pressure on non-yielding assets. Economic indicators further underscored underlying stress, as the University of Michigan’s Consumer Sentiment Index was revised upward slightly to 49.8, yet it remains at historically weak levels. On the policy front, there is a prevailing expectation that the Federal Reserve will maintain interest rates at their current levels in the near term.
In the interim, CME Group’s choice to lower margins on COMEX silver futures is expected to enhance market participation and liquidity. Demand from China remains a significant supportive element. Imports reached an unprecedented 836 metric tons in March, nearly three times the long-term average, propelled by robust retail investment demand and proactive stockpiling by the photovoltaic sector. Heightened domestic prices in China have similarly stimulated global arbitrage movements into the nation.
Conversely, the inventory in London vaults experienced a slight increase, suggesting sufficient global supply conditions. From a technical perspective, the market is experiencing short covering, as evidenced by a 10.87% decline in open interest in conjunction with increasing prices. Immediate support is identified at Rs 240,095, with a breach below expected to challenge Rs 235,560. On the upside, resistance is positioned at Rs 247,360, and a breach of this level may facilitate an extension of gains toward Rs 250,090.