Silver prices concluded the trading session with an increase of 0.27%, reaching Rs 279,062, driven by enhanced prospects for industrial demand and ongoing geopolitical uncertainty that continues to bolster the metal’s value. Market participants continued to concentrate on the economic ramifications of the ongoing Iran conflict, particularly its effects on inflation, energy prices, and global growth projections. Headline US inflation accelerated to 3.8%, the highest since March 2023 and above market expectations of 3.7%.
This increase is primarily attributed to elevated gasoline prices, which have been influenced by disruptions related to the Iran war and the closure of the Strait of Hormuz. Core inflation exceeded expectations, registering at 2.8%, while monthly consumer prices experienced a 0.6% increase in April, following a significant 0.9% rise in March. The geopolitical landscape continued to exhibit tension as US President Donald Trump remarked that the ceasefire with Iran was “on life support” in light of Tehran’s dismissal of Washington’s peace proposal. Persistently high energy prices and stronger inflation expectations have reinforced views that the Federal Reserve may maintain interest rates at their current levels for an extended duration, with markets currently assigning nearly a 27% probability to a 25 basis point rate increase by December.
Fundamentally, silver continues to receive support from expectations of another year characterized by a structural supply deficit, as noted by the Silver Institute. Global physical silver investment demand is projected to increase by 20% this year, propelled by enhanced investor engagement and ongoing industrial consumption from sectors including solar energy, electric vehicles, and electronics. In March, China experienced a remarkable increase in silver imports, reaching a historic high of 836 metric tons. This surge can be attributed to heightened retail investment demand and significant stockpiling activities by manufacturers in the photovoltaic sector.
From a technical perspective, the market is experiencing renewed buying activity, evidenced by a 5.08% increase in open interest, which settled at 7,693, alongside a price gain of Rs 751. Silver is currently establishing support at Rs 273,875, beneath which prices could potentially approach the Rs 268,685 levels. Resistance is identified at Rs 283,505, and an upward movement beyond this threshold may drive prices towards Rs 287,945.