Silver prices experienced a notable rebound, closing 2.73% higher at Rs 246,186, even amidst ongoing concerns regarding global interest rate expectations. The recovery was bolstered by a reduction in geopolitical tensions following signs that a potential US-Iran peace agreement might be imminent, resulting in a decrease in crude oil prices. However, the broader macroeconomic environment continued to pose challenges for precious metals, as major central banks maintained a restrictive monetary policy stance. The European Central Bank has increased interest rates and adjusted its inflation projections upward for both 2026 and 2027.
Meanwhile, US producer prices experienced a year-on-year rise of 6.5% in May, underscoring ongoing inflationary pressures. Robust conditions in the US labour market and steadfast economic indicators have bolstered anticipations that the Federal Reserve might maintain higher interest rates or contemplate further tightening actions. Fundamentally, the demand for silver continues to be strong. China’s silver imports soared to an unprecedented 836 metric tonnes in March, nearly tripling the historical average for that month. The increase was propelled by robust retail investment demand and proactive stockpiling by the photovoltaic industry in anticipation of adjustments to export tax rebates.
Increased domestic silver prices in China have also stimulated global shipments into the country via arbitrage opportunities. Meanwhile, silver holdings in London vaults rose by 0.6% at the end of May, reaching 27,611 tonnes, indicating robust inventory levels. In India, the government has enacted restrictions on the importation of silver bars and semi-manufactured silver products, which represent over 90% of the nation’s silver imports. The initiative seeks to lower import volumes and alleviate pressure on the rupee following unprecedented silver imports totalling $12 billion in FY2025-26.
Silver is currently experiencing new buying interest, as indicated by a slight increase in open interest along with rising prices. Immediate support is identified at Rs 241,790, with additional downside support located at Rs 237,395. On the upside, resistance is positioned at Rs 248,790, and a decisive breakout above this level could pave the way for a move towards Rs 251,395.