Silver prices increased by 1.5%, closing at Rs 2,48,364, bolstered by a reduction in geopolitical tensions following the U.S. decision to extend the ceasefire with Iran. Despite the absence of a second round of peace talks, the choice to postpone additional military action contributed to a stabilization of market sentiment. Nevertheless, uncertainty continues to be high, as Iran maintains its stance on not reopening the Strait of Hormuz and indicates a reluctance to engage in negotiations, thereby sustaining a certain level of risk premium.
Concurrently, macroeconomic factors constrained more significant upward movement. In his Senate hearing, Federal Reserve Chair nominee Kevin Warsh underscored the importance of policy independence and advocated for a reformed inflation framework, yet provided scant insight into the trajectory of interest rates. Robust U.S. retail sales figures, which increased by 1.7% in March, diminished safe-haven demand by bolstering confidence in economic resilience. On the demand side, China exhibited robust underlying support.
In March, silver imports reached an unprecedented 836 metric tonnes, nearly tripling the long-term average. This surge can be attributed to robust purchasing by retail investors looking for alternatives to high-priced gold, as well as significant stockpiling by the solar sector in anticipation of upcoming tax changes. Heightened domestic premiums in China stimulated international inflows, with Hong Kong serving as a crucial transit hub. Meanwhile, London vault holdings increased by 1.6% to 27,487 tonnes, reflecting consistent institutional positioning.
From a technical perspective, the market is experiencing short covering, as evidenced by a 5.51% decrease in open interest, bringing it down to 5,499. Immediate support is identified at Rs 2,46,580, with potential further decline to Rs 2,44,800, whereas resistance is positioned at Rs 2,50,420. A breakout above this level may drive prices towards Rs 2,52,480.