As increased geopolitical tensions in the Middle East led to a steep increase in crude oil prices, silver prices fell 2.22% to Rs 217,718, raising concerns that inflation may continue to be high and compel central banks to adopt a tighter monetary policy approach. The U.S. executed another strike against Iran in response to an assault on a commercial vessel, while Tehran reaffirmed its commitment to closing the Strait of Hormuz, contributing to heightened uncertainty in global financial markets.
Investors are currently concentrating on the forthcoming U.S. inflation data and Federal Reserve Chair Kevin Warsh’s congressional testimony for additional insights regarding interest rate expectations. The economic data from the United States revealed a varied landscape. In June, existing home sales experienced a decline of 2.4%, reaching an annualised pace of 4.09 million units, which fell short of market expectations. Conversely, initial jobless claims saw an unexpected decrease to 215,000, underscoring the ongoing resilience of the labour market. New York Fed President John Williams highlighted that demand propelled by artificial intelligence continues to be a notable factor in inflationary pressures. Markets currently expect one more Federal Reserve rate increase before the conclusion of the year.
Meanwhile, CFTC data indicated that COMEX silver speculators decreased their net long positions by 616 contracts, bringing the total to 12,131 contracts, which suggests a decline in bullish sentiment. In the physical market, silver holdings in London vaults experienced a 0.6% increase in May. India’s silver imports experienced a significant decline, dropping 87% in value and 94% in volume compared to the previous year. This sharp decrease follows the government’s implementation of stricter import restrictions and an increase in import duties aimed at controlling the inflow of precious metals and safeguarding foreign exchange reserves.
Silver is currently experiencing new selling activity, as evidenced by a 2.91% increase in open interest, which suggests the establishment of new short positions. Immediate support is positioned at Rs 216,240, succeeded by Rs 214,760. Resistance is observed at Rs 220,235, and a sustained movement above this threshold could lead to further gains toward Rs 222,750.