Silver prices concluded the trading session with an increase of 0.70% at Rs 264,796, buoyed by a depreciating U.S. dollar and diminishing inflation worries, as optimism grew for a diplomatic solution to the ongoing tensions in the Middle East. Optimism has increased following the agreement between Israel and Lebanon to implement a ceasefire, which has heightened expectations for a wider de-escalation that includes Iran. Additional support emerged following the passage of a resolution by the U.S. House of Representatives, which sought to restrict further military action against Iran. This development contributed to a decrease in safe-haven demand for the dollar and fostered improved sentiment within commodity markets.
Despite the optimistic sentiment in the market, officials from the Federal Reserve adopted a prudent approach regarding inflation. Dallas Fed President Lorie Logan indicated that monetary policy may need to remain mildly restrictive or even become tighter to bring inflation back to the Fed’s 2% target. Cleveland Fed President Beth Hammack cautioned that disruptions to global energy supply chains may endure for months, even in the event of a de-escalation of tensions in the Middle East, thereby posing continuous economic challenges. Fundamentally, the silver market continues to be underpinned by robust trends in physical demand. India has imposed stricter regulations on silver imports by categorising grain, powder, bars, and the majority of semi-manufactured forms as restricted, necessitating import authorisation.
The action aims to diminish import volumes and alleviate pressure on the rupee; however, it may constrict domestic supplies and elevate local premiums. Meanwhile, China’s silver imports surged to a record 836 metric tonnes in March, driven by robust retail investment demand and proactive stockpiling by the photovoltaic industry in anticipation of tax policy changes. London vault silver holdings totalled 27,454 tonnes at the conclusion of April, reflecting a modest decline from the preceding month.
Silver is currently experiencing renewed buying interest, as evidenced by a 2.05% increase in open interest, bringing the total to 11,732 contracts. Immediate support is identified at Rs 261,660, with a breach of this threshold likely to challenge Rs 258,525. On the upside, resistance is positioned at Rs 267,865, and a sustained move above this level could pave the way toward Rs 270,935.