Silver prices concluded the trading session with an increase of 1.75%, reaching Rs 276651. This uptick can be attributed to a decline in the U.S. dollar and softer crude oil prices, which alleviated inflationary worries and bolstered the sentiment surrounding precious metals. However, gains remained partially constrained due to elevated U.S. bond yields following stronger-than-anticipated inflation data, which diminished expectations for Federal Reserve rate cuts this year and heightened speculation regarding a potential rate hike before the year’s conclusion. Investors remained vigilant regarding the evolving situation in the Middle East, as reports indicated a potential diplomatic breakthrough involving the United States and Iran, which could entail sanctions relief and a long-term freeze on Iran’s nuclear program.
The market’s sentiment experienced additional shifts following UBS’s updated demand projections, which lowered its full-year forecast for silver investment demand to 300 million ounces, down from a previous estimate exceeding 400 million ounces. The bank has revised its estimate for the global silver market deficit to approximately 60–70 million ounces, a significant adjustment from previous projections of nearly 300 million ounces. This change is indicative of a decline in industrial demand alongside enhanced supply conditions. Notwithstanding this, physical demand from China continued to exhibit remarkable strength. In March, China’s silver imports reached an unprecedented 836 metric tons, nearly three times the long-term seasonal average.
This surge was driven by robust retail investment demand and proactive stockpiling by the photovoltaic sector in anticipation of forthcoming changes to export tax rebates. Domestic silver premiums in China have consistently exceeded international benchmarks, fostering global shipments into the country through arbitrage mechanisms, predominantly via Hong Kong. India has implemented restrictions on the importation of silver bars and semi-manufactured silver products in an effort to address unprecedented import levels and alleviate pressure on the rupee. The action is anticipated to constrict domestic supply and may lead to an elevation in local premiums. India recorded an unprecedented expenditure of $12 billion on silver imports in FY2025-26, with imports in April surging by 157% compared to the previous year.
From a technical perspective, the market is experiencing new buying activity, evidenced by a 4.53% increase in open interest to 8638, alongside a price increase of Rs 4765. Silver is finding support at Rs 267600; a decline below this level could see prices testing the Rs 258550 mark. Resistance is identified at Rs 283050, and surpassing this level may propel prices towards Rs 289450.