Silver prices experienced a notable decline of 2.2%, closing at Rs 270,628. This drop can be attributed to ongoing geopolitical uncertainties and increasing apprehensions regarding inflation-driven tighter monetary policy. Escalating tensions in the Middle East persistently affect market sentiment following reports that the US military has targeted missile launch sites and vessels in southern Iran. Despite reports of advancing diplomatic discussions between the US and Iran, apprehensions regarding potential military escalation have maintained a cautious stance among investors.
Silver prices have now declined by nearly 20% since the onset of the conflict, as heightened energy prices have bolstered expectations that global central banks may sustain restrictive interest rate policies for an extended period. Federal Reserve officials also upheld a prudent approach regarding inflation. Richmond Fed President Thomas Barkin indicated that the prevailing monetary policy is suitably aligned to tackle economic shocks, while highlighting the uncertainty surrounding inflation and growth risks. Market participants are currently paying close attention to the forthcoming US PCE inflation report for further guidance on prospective Federal Reserve policy decisions.
On the demand side, China’s silver imports reached an unprecedented 836 metric tonnes in March, nearly tripling the historical seasonal average. Robust retail investment demand, coupled with proactive stockpiling by the photovoltaic sector in anticipation of changes to export tax rebates, has markedly enhanced import levels. Heightened domestic silver premiums in China have also stimulated global arbitrage movements via Hong Kong. Meanwhile, India has implemented new restrictions on silver imports across various categories to alleviate pressure on the rupee and address increasing import bills.
India’s silver imports had previously reached a record $12 billion during FY 2025-26, supported largely by strong investment demand and record ETF inflows. Technically, the market is experiencing renewed selling pressure, evidenced by a 3.15% increase in open interest to 9,473 lots, coinciding with a sharp decline in prices. Silver is maintaining support levels at Rs 268,605 and Rs 266,585, with resistance identified at Rs 273,685 and subsequently at Rs 276,745.