Silver prices experienced a decline of 0.94%, settling at Rs 266,998. This downturn was influenced by a stronger Indian Rupee, which traded above the 95 level, alongside diminishing geopolitical tensions following reports of a preliminary agreement between the United States and Iran. Market sentiment improved following indications that both nations are contemplating a framework aimed at extending the ceasefire and reopening the Strait of Hormuz, thereby alleviating concerns regarding supply disruptions and inflationary pressures. Further pressure emerged from the latest U.S. Personal Consumption Expenditures inflation data, which bolstered expectations that the Federal Reserve might sustain a restrictive monetary policy stance for an extended duration.
Kansas City Fed President Jeff Schmid indicated that policymakers might have to contemplate a more restrictive monetary policy and underscored the Fed’s dedication to steering inflation back toward its 2% target. Despite the decline, the underlying fundamentals continue to provide support. China’s silver imports reached an unprecedented 836 metric tonnes in March, nearly tripling the historical average. This surge was propelled by robust retail investment demand and proactive stockpiling by the photovoltaic sector in anticipation of changes to export tax rebates.
Elevated domestic silver prices in China have stimulated global shipments into the country, underscoring strong physical demand. Meanwhile, silver holdings in London vaults experienced a slight decrease of 0.1%, totalling 27,454 tonnes at the end of April, suggesting ongoing constraints in available inventories. In India, the government has enacted restrictions on the importation of silver bars and semi-manufactured silver products, which accounted for over 90% of total silver imports in the previous fiscal year. While these measures may reduce global demand, they are anticipated to tighten domestic supply and bolster local premiums.
India recorded an unprecedented $12 billion in silver imports during FY2025/26, with imports in April experiencing a remarkable year-on-year increase of 157%. Technically, the market is experiencing renewed selling pressure, evidenced by a 0.68% rise in open interest to 10,115 contracts, coinciding with a decline in prices. Immediate support is observed at Rs 264,130, succeeded by Rs 261,265. Resistance is positioned at Rs 269,630, and a breakout above this threshold could propel prices toward Rs 272,265.