Silver prices increased by 1.44% to close at Rs 226,998, bolstered by ongoing geopolitical tensions in the Middle East and escalating crude oil prices. This environment has enhanced safe-haven demand and heightened inflation concerns. Market sentiment exhibited a degree of caution following U.S. President Donald Trump’s indication of constrained prospects for prompt negotiations with Iran, alongside a warning of potential further military action. Additional disruptions to Red Sea shipping by Iran-backed Houthi rebels and attacks affecting Russian energy infrastructure have further intensified supply concerns in global energy markets, reinforcing expectations of sustained inflationary pressures.
On the macroeconomic front, U.S. labour market data indicated that private employers added an average of merely 16,500 jobs per week during the four weeks concluding July 4, signifying the fourth consecutive deceleration in hiring. Markets broadly anticipate that the Federal Reserve will maintain its current interest rate levels at the forthcoming meeting, despite a notable increase in expectations for a rate hike in September, which now exceeds 55%. Several Federal Reserve officials, including Beth Hammack, Lorie Logan, Philip Jefferson, and Chair Kevin Warsh, maintained a cautious stance, emphasising the necessity of controlling inflation should price pressures continue.
Meanwhile, ANZ anticipates that silver will maintain a close correlation with gold in the short term, while forecasting more robust fundamental support in the medium to long term. London vault silver holdings experienced a month-on-month increase of 1.7%, reaching 28,082 tonnes by the conclusion of June. India’s silver imports fell by 87% year-on-year in May, reaching the lowest level in over three years. This decline can be attributed to stricter import restrictions and increased import duties, which have considerably curtailed inflows.
Technically, silver experienced short covering, as open interest decreased by 3.67% while prices increased. Immediate support is positioned at Rs 224,595, with subsequent support at Rs 222,195, while resistance is observed at Rs 229,190. A decisive breakout above this level could push prices towards Rs 231,385.