Silver prices concluded the trading session with an increase of 1.76%, reaching Rs 237,410. This uptick was bolstered by disappointing US labour market data, which diminished the likelihood of an imminent interest rate increase by the Federal Reserve. In June, US nonfarm payrolls experienced an increase of merely 57,000, falling considerably short of the market expectation of 110,000. This figure represents the most subdued job growth observed in the past four months. According to the CME FedWatch tool, the probability of a September Fed rate hike has decreased to 50%, down from 66%.
A broad decline in the US dollar, which recorded its largest weekly fall since April, further bolstered precious metals. Fed Chair Kevin Warsh indicated that inflation expectations are showing signs of moderation, while also reaffirming the Federal Reserve’s dedication to maintaining price stability. Meanwhile, Mary Daly observed that monetary policy continues to exhibit a slight degree of restrictiveness, although robust investment in AI and a stable labour market contribute to an uncertain policy outlook.
Fundamentally, silver holdings in London vaults rose by 0.6% to 27,611 tonnes at the end of May, reflecting stable institutional inventories. In contrast, India’s silver imports experienced a significant decline of 87% year-on-year in value and 94% in volume, totalling merely 33 metric tonnes. This marks the lowest level since February 2023, a result of stricter import restrictions and elevated import duties intended to curtail precious metals imports and alleviate pressure on foreign exchange reserves.
From a technical perspective, the market is witnessing short covering, with open interest declining by 3.07% while prices advanced by Rs 4,106, indicating the unwinding of bearish positions. Immediate support is positioned at Rs 236,315, succeeded by Rs 235,215, whereas resistance is identified at Rs 238,695. A sustained move above this level could open the door for further gains towards Rs 239,975.