Silver prices concluded the trading session with a slight increase of 0.23% at Rs 274,883, bolstered by short covering following earlier declines. This movement was influenced by ongoing geopolitical tensions and robust industrial demand, which have consistently supported market sentiment. Market concerns intensified after prospects of a US-Iran peace agreement weakened following reports that Iran’s leadership insisted on retaining its uranium stockpile domestically, heightening fears of prolonged tensions in the Middle East.
Simultaneously, the minutes from the Federal Reserve revealed that a number of policymakers continue to support further monetary tightening should inflation remain stubbornly above the 2% target. Numerous officials also favoured eliminating language that had previously indicated a bias toward policy easing, thereby strengthening expectations for sustained higher interest rates. The economic data emanating from the United States presents a mixed picture. Initial jobless claims decreased modestly to 209,000, indicating ongoing strength in the labour market, whereas continuing claims rose to 1.782 million. Housing starts experienced a decline of 2.8% in April, yet they remained above market expectations. In contrast, building permits saw a robust rebound of 5.8%, suggesting an underlying stability within the US housing sector.
Silver demand from China exhibited remarkable strength, as March imports soared to an unprecedented 836 metric tonnes, nearly tripling the historical average for the month. Robust retail investment demand, coupled with proactive stockpiling by photovoltaic manufacturers in anticipation of changes to export tax rebates, has markedly enhanced import levels. Heightened domestic Chinese silver premiums stimulated global shipments into China via arbitrage opportunities. Meanwhile, India has implemented stricter regulations on silver imports in various forms to mitigate excessive inflows and alleviate pressure on the rupee.
The action is anticipated to constrain domestic supplies and may lead to a rise in local premiums. Technically, the market is experiencing renewed buying interest, evidenced by a 0.82% increase in open interest to 9,189 lots, alongside a price increase of Rs 618. Silver is maintaining support at Rs 270,590, with additional downside support at Rs 266,295, while resistance is positioned at Rs 277,340 and Rs 279,795 levels.