Silver prices experienced a notable increase of 4.93%, concluding at Rs 252,750. This rise can be attributed to a positive shift in market sentiment, prompted by indications from the U.S. and Iran regarding their readiness to engage in discussions aimed at establishing a prolonged ceasefire. In the wake of increased tensions due to the U.S. naval blockade in the Strait of Hormuz, both parties have expressed a willingness to engage in dialogue.
This development has contributed to a stabilization of risk sentiment, while concurrently bolstering demand for safe-haven assets. On the macroeconomic front, inflation continues to be a central theme. The most recent U.S. Consumer Price Index data indicated that annual inflation escalated to 3.3% in March, marking the highest level since May 2024, accompanied by a notable monthly increase of 0.9%.
Core inflation, however, remained relatively contained at 0.2% month-on-month, slightly below expectations. The Fed’s preferred gauge, the PCE index, registered at 2.8% in February and is anticipated to have increased slightly in March, heightening apprehensions that inflation could remain persistently high for an extended period. In the interim, silver reserves in London vaults rose by 1.6% to 27,487 tonnes, indicating consistent institutional demand.
From a technical perspective, the market is experiencing short covering, as evidenced by a 5.61% decline in open interest to 5,505 contracts, coinciding with a notable rally in prices. Immediate support is observed at Rs 245,065, with a possible decline toward Rs 237,385. On the upside, resistance is positioned at Rs 256,740, and a breakout above this level could propel prices toward Rs 260,735.