Silver prices concluded the trading session with a 2.33% increase, reaching Rs 236,867. This uptick was bolstered by an unforeseen contraction in the U.S. labour market, which subsequently diminished expectations for an imminent rate hike by the Federal Reserve. The U.S. economy experienced a contraction of 23,000 jobs in July, succeeding a downwardly adjusted increase of 20,000 in June, and significantly falling short of the anticipated 80,000 gain. The softer employment data enhanced investor sentiment toward precious metals, while geopolitical uncertainty regarding Iran-U.S. discussions further bolstered safe-haven demand.
COMEX speculative net-long positions in silver increased by 2,679 contracts to 11,067 contracts in the week ended August 4, indicating a notable improvement in bullish positioning despite silver’s relatively lower market liquidity. Physical demand signals exhibited a mixed picture, as Perth Mint silver sales surged by 65.5% month-on-month, reaching 486,043 ounces in July, while also increasing by 7.5% year-on-year. London vault holdings rose by 1.7% month-on-month, reaching 28,082 tonnes at the end of June, with a valuation of $53.1 billion.
However, Indian imports exhibited weakness following the implementation of stricter government restrictions, with May imports experiencing a significant decline of 87% year-on-year in value, amounting to $75.57 million, and a 94% drop in volume to 33 tonnes, marking the lowest levels since February 2023. India has increased import duties on gold and silver to 15%, up from the previous rate of 6%.
Technically, the market continues to experience short covering, as open interest has decreased by 0.3% to 11,144 contracts, while prices have increased by Rs 5,401. Silver is currently finding support at Rs 233,280, and a breach of this level may reveal Rs 229,695. On the upside, resistance is positioned at Rs 238,830; a sustained movement above this threshold may catalyse additional gains toward Rs 240,795.
