Despite assistance from a declining US dollar, silver futures ended the day lower by 0.21% at Rs 216,746 as demand for safe havens decreased due to a reduction in global tensions. Market sentiment improved following indications from U.S. President Donald Trump that key Middle Eastern allies, including Saudi Arabia, had advocated for a diplomatic resolution rather than military action, while also supporting the prompt reopening of the Strait of Hormuz. Investors maintained a cautious stance in anticipation of a series of significant U.S. labour market releases, culminating in the monthly nonfarm payrolls report, which has the potential to offer new insights into Federal Reserve policy direction.
Despite the Federal Reserve’s decision to maintain interest rates last week, three policymakers expressed dissent, contending that postponing additional tightening measures might necessitate more forceful actions in the future. Markets are currently assessing a nearly 68% likelihood of a 25-basis-point rate increase in September. Recent economic data reflected mixed signals for precious metals. The U.S. economy experienced an annualised growth rate of 1.5% in the second quarter of 2026, falling short of expectations.
Concurrently, the PCE price index registered a month-on-month decline of 0.1% in June, suggesting a moderation in inflationary pressures. Weekly jobless claims increased to 197,000, yet they continued to fall short of market expectations. Meanwhile, CFTC data indicated that COMEX silver speculative net long positions decreased by 1,614 contracts to 8,387 contracts, underscoring a decline in bullish sentiment. London silver vault holdings rose by 1.7% month-on-month to 28,082 tonnes, whereas India’s silver imports experienced a significant decline due to stricter import restrictions and elevated duties, indicating a downturn in physical demand.
Technically, silver is experiencing renewed selling pressure, as evidenced by a 2.12% increase in open interest to 13,272 contracts, coupled with a decline in prices, suggesting a new short build-up. Immediate support is positioned at Rs 213,880, with a subsequent level at Rs 211,020 should selling pressure escalate. On the upside, resistance is observed at Rs 219,500, and a sustained breakout above this level may lead to an extension of gains towards Rs 222,260.