Silver prices increased by 1.25%, closing at Rs 269,537, as investors weighed the optimistic prospects for peace negotiations in the Middle East against ongoing inflation worries and a prudent outlook from the Federal Reserve. Market sentiment remained buoyed as Federal Reserve officials reiterated their commitment to controlling inflation. Fed Governor Lisa Cook supported the decision to keep interest rates steady, while also indicating a willingness to consider further increases should inflationary pressures escalate.
New York Fed President John Williams cautioned that inflation may near 4% in the short term, thereby bolstering anticipations of a sustained period of elevated interest rates. Geopolitical uncertainty persisted in bolstering demand for precious metals, following President Donald Trump’s reaffirmation that the United States would not entertain what he characterised as an unfavourable agreement with Iran, alongside his dismissal of proposals to relax sanctions. Federal Reserve Vice Chair Philip Jefferson underscored the importance of bringing inflation back to the Fed’s 2% target, while also acknowledging the resilience of the U.S. labour market in the face of persistent disruptions in the energy sector. Robust physical demand from China continued to serve as a significant supportive element for silver prices.
China imported approximately 836 metric tonnes of silver during March, which is nearly three times the historical ten-year average for that month. The surge was driven by robust retail investment demand for silver bars as a cost-effective alternative to gold, coupled with significant stockpiling by the photovoltaic industry in anticipation of forthcoming changes in export tax rebate policies. Heightened domestic silver premiums in China have stimulated global arbitrage shipments via Hong Kong. In India, the government has implemented restrictions on the importation of silver bars and semi-manufactured silver products as a measure to mitigate increasing import levels and alleviate pressure on the rupee.
India’s silver imports experienced a notable increase during FY 2025-26, driven by robust investment demand and unprecedented ETF inflows. Technically, the market experienced new buying activity, with open interest rising by 5.7% to reach 10,046 lots. Silver is maintaining support at Rs 263,730 and Rs 257,915, with resistance identified at Rs 272,630 and subsequently at Rs 275,715.