Silver concluded the trading session with a notable increase of 2.49%, reaching Rs 2,31,466. This rise was bolstered by diminished anticipations of additional tightening measures from the Federal Reserve, following disappointing employment figures from the United States. In July, U.S. nonfarm payrolls experienced an unexpected decline of 23,000, accompanied by notable downward revisions for the preceding two months, indicating a deterioration in the labour market. The unemployment rate edged down to 4.1%, yet the decline in labor-force participation has heightened concerns regarding employment conditions.
The softer labour outlook diminished expectations for a September rate hike, leading to a decline in yields and providing a boost to precious metals. Meanwhile, the decline in fuel and natural gas prices, coupled with advancements in negotiations between Iran and Oman regarding the Strait of Hormuz, contributed to a reduction in energy-market risks. Industrial demand for silver remained robust, as evidenced by a 62.5% year-on-year increase in Chinese imports of silver-bearing ores in June, reaching 219,000 tonnes. This surge underscores the growing demand driven by the production of solar panels and electricity grids. Physical market developments exhibited a varied landscape.
At the conclusion of June, London vaults contained 28,082 tonnes of silver, reflecting a month-on-month increase of 1.7%, with a valuation of $53.1 billion. In India, silver imports experienced a significant decline of 87% year-on-year in May, amounting to $75.57 million. Concurrently, volumes dropped by 94% to 33 tonnes, marking the lowest level since February 2023. Import restrictions and an increase in duties from 6% to 15% significantly impacted inflows, even in the context of record annual imports amounting to $12 billion in FY2025/26.
Technically, the market is experiencing short covering, as evidenced by a 3.74% decline in open interest to 11,177, while prices have increased by Rs 5,630. Silver exhibits a support level at Rs 2,27,470; a breach of this threshold may lead to a test of Rs 2,23,475. Resistance is positioned at Rs 2,35,470, and a sustained movement above this threshold could propel prices toward Rs 2,39,475.