Silver prices experienced a significant decline of 6.6%, closing at Rs 271886. This downturn was driven by escalating concerns over U.S. inflation and anticipations of a more stringent monetary policy, which led to substantial selling activity in the precious metals market. Recent U.S. economic data indicated that producer, import, and export prices experienced their most significant monthly increases since 2022. Concurrently, annual inflation rose to its highest level since 2023, driven by elevated energy costs associated with the ongoing conflict in Iran and persistent disruptions in the Strait of Hormuz.
Market participants have completely eliminated the likelihood of a Federal Reserve rate cut occurring in 2026, with certain traders even adjusting their positions in anticipation of a possible rate increase by December. Minneapolis Federal Reserve President Neel Kashkari reiterated a hawkish stance, underscoring the Fed’s dedication to controlling inflation. UBS has revised its forecast for global silver investment demand downward to 300 million ounces, a decrease from over 400 million ounces, attributing this adjustment to weaker industrial demand and an increase in mine supply.
The bank has significantly revised its estimate for the global silver supply deficit, now projecting it to be approximately 60–70 million ounces, a substantial decrease from the previous forecast of 300 million ounces. HSBC has upheld a positive long-term perspective by increasing its silver price projections for 2026 and 2027, underpinned by anticipated growth in demand for coins and bars. In March, China experienced a remarkable increase in silver imports, reaching an unprecedented 836 metric tons. This surge was primarily fueled by robust retail investment demand and proactive stockpiling by the photovoltaic sector in anticipation of forthcoming changes to export tax rebates.
From a technical perspective, the market is experiencing long liquidation, evidenced by a 1.31% decrease in open interest to 8247, alongside a price decline of Rs 19216. Silver is finding support at Rs 265850, with additional downside anticipated at Rs 259820. Resistance is established at Rs 280565, and a breach of this level may initiate additional recovery towards Rs 289250.