Silver prices extended gains, settling 1.32% higher at Rs 226,377, bolstered by a weaker U.S. dollar. However, advances were constrained as investors remained vigilant regarding escalating geopolitical tensions in the Middle East and their possible implications for inflation and global monetary policy. Market sentiment exhibited a degree of caution following recent U.S. military strikes on Iran, which prompted retaliatory actions directed at Kuwait and Bahrain. However, remarks from President Donald Trump suggesting that Iran had shown a willingness to engage in negotiations contributed to alleviating concerns regarding a wider regional conflict.
The Federal Reserve’s latest meeting minutes underscored persistent worries regarding inflation, with multiple policymakers indicating that an additional interest rate hike might be required, even though rates were maintained at the last meeting. Markets are currently assigning a 63% probability to the likelihood of a rate hike in September. Meanwhile, the International Monetary Fund has kept its 2026 global growth forecast at 3%, indicating a stronger-than-anticipated resilience of the global economy in the face of geopolitical tensions and ongoing backing from investments driven by artificial intelligence. The IMF has revised its 2027 global growth forecast upward to 3.4%, while it anticipates global inflation will increase to 4.7% in 2026 before moderating in 2027.
Fundamental developments exhibited a mixed performance for silver. Holdings in London vaults rose by 0.6% in May, reaching a total of 27,611 tonnes, which suggests a consistent level of investment demand. In contrast, India’s silver imports experienced a significant decline in May due to the implementation of stricter import restrictions and increased import duties. These measures were designed to curtail precious metal imports and alleviate the strain on foreign exchange reserves, which had reached record levels in the preceding financial year.
Technically, silver continues to attract new buying interest, as evidenced by a 3.25% increase in open interest in conjunction with rising prices. Immediate support is positioned at Rs 222,690, with subsequent support at Rs 219,000, while resistance is identified at Rs 228,880. A sustained move above this level could open the way for further gains toward Rs 231,380.