Silver prices experienced a notable increase of 2.25%, closing at Rs 221,615. This rise was bolstered by enhanced market sentiment following U.S. President Donald Trump’s announcement regarding the resumption of peace talks with Iran, which alleviated geopolitical tensions and contributed to a decline in crude oil prices. Easing energy prices contributed to alleviating inflation concerns, while investors redirected their focus towards a series of crucial U.S. labour market reports, including the forthcoming non-farm payrolls data, for additional insights into the Federal Reserve’s monetary policy trajectory.
Despite the Federal Reserve maintaining its current interest rates during the most recent meeting, market participants are still factoring in an approximate 68% likelihood of a 25-basis-point increase in September, influenced by the hawkish dissent expressed by three policymakers. Meanwhile, the U.S. economy expanded at an annualised 1.5% in the second quarter, falling short of expectations, while the PCE price index experienced a decline of 0.1% in June, suggesting a moderation in inflationary pressures. Market fundamentals exhibited a mixed performance. The CFTC reported that COMEX silver speculative net long positions declined by 1,614 contracts to 8,387 contracts, indicating a decrease in bullish positioning.
London silver vault holdings rose by 1.7% month-on-month, reaching 28,082 tonnes, with a valuation of around $53.1 billion. In India, there has been a significant decline in silver imports following the implementation of stricter government regulations and increased import duties. In May, imports experienced a significant decline, falling 87% in value and 94% in volume year-on-year, totalling merely 33 tonnes. This marks the lowest level observed since February 2023. The government has increased import duties on gold and silver to 15%, aiming to reduce precious metal imports and alleviate pressure on foreign exchange reserves.
From a technical perspective, silver experienced notable short covering, as open interest decreased by 4.86% while prices rose sharply. Immediate support is identified at Rs 219,105, with subsequent support at Rs 216,600. Resistance is established at Rs 223,155. A decisive breakout above this level could open the door for further gains towards Rs 224,700, indicating that the near-term technical bias remains positive.