Silver prices concluded the trading session with a 0.76% increase, reaching Rs 217,479. This uptick was attributed to short covering following prior declines, as renewed geopolitical tensions in the Middle East contributed to a rise in crude oil prices, thereby reigniting concerns regarding inflation. Market sentiment remained concentrated on the US Federal Reserve following its decision to maintain the federal funds rate at 3.50%-3.75% for a fifth consecutive meeting in July 2026, aligning with prevailing expectations. Nonetheless, expectations that the Fed may tighten monetary policy in September were strengthened by the opposition of three FOMC members in favour of a 25-basis-point rate increase.
The central bank also maintained that the US economy continues to expand at a solid pace despite elevated uncertainty linked to the Middle East conflict. Meanwhile, several Federal Reserve officials, including Beth Hammack and Lorie Logan, indicated that further policy tightening might be required if inflation continues to be persistent, while Fed Chair Kevin Warsh reaffirmed the central bank’s dedication to achieving price stability. Geopolitical risks have escalated following Iran’s launch of ballistic missiles aimed at US forces in Jordan, raising fresh apprehensions regarding potential disruptions to energy supplies and the implications for inflation.
Recent US economic data indicated a decline in both consumer and producer prices in June, primarily attributed to reduced energy costs; however, there was an unexpected rise in import prices. ANZ anticipates that silver will continue to be closely correlated with gold in the short term, while projecting an enhancement in fundamentals over the medium to long term. Silver holdings in London vaults increased by 1.7% month-on-month, reaching a total of 28,082 tonnes by the end of June. In India, silver imports experienced a dramatic decline of 87% year-on-year in May, reaching their lowest level in over three years.
This significant drop follows the government’s implementation of stricter import restrictions and an increase in import duties from 6% to 15%, aimed at curbing the influx of precious metals. Technically, the market is experiencing short covering, as evidenced by a 3.67% decline in open interest to 12,748 contracts, accompanied by a price increase of Rs 1,639. Silver exhibits immediate support at Rs 214,940, with subsequent support at Rs 212,395. Resistance is established at Rs 219,515. A sustained move above this level could open the way towards Rs 221,545.