Silver prices closed up 0.2% at 72627, boosted by restored optimism about the Federal Reserve’s (Fed) early rate cuts. Geopolitical tensions were heightened by Saudi Arabia’s call for moderation and the United States and Britain’s launch of strikes against Houthi movement-affiliated locations in Yemen.
The most recent Producer Price Index (PPI) report showed that December’s unexpected 0.1% decrease was less than the market’s predicted 0.1% increase.
Silver Prices increased by 1% annually, outpacing the 0.8% gain in the previous month but not quite reaching the 1.3% target. Consensus expectations were also not met by core rates.
Although it is generally anticipated that the Fed will keep interest rates between 5.25 and 5.50%. The outlook for rates in March is still a little bit hawkish.
It has been suggested by Fed policymakers, such as John Williams, Loretta Mester, and Raphael Bostic. That a decision to lower interest rates in March is premature.
Mester underlined that additional data is required in order to be certain that inflation will gradually drop to 2%. She emphasised the need to keep a tight monetary policy in place and mentioned areas where costs of goods, housing, and shelter need to be further reduced in addition to a slowdown in wage growth.
Technically speaking, there was new buying in the silver market. As evidenced by the 2.99% rise in open interest, which ended at 22,320.
Silver finds support at 72400, with a potential test of 72170, despite a rise of 147 rupees. Prices may test 73070 if there is a breakthrough, with resistance likely at 72850.