Silver prices saw a slight decrease of -0.13%, ultimately landing at 71773. This was largely due to the strong dollar due to strong U.S. economic growth. The European Central Bank (ECB) committed to fighting inflation even in the face of disinflation signals and possible recessionary risks by keeping interest rates unchanged.
The current strength of the US dollar is a result of the European Central Bank ECB’s position. The economy grew at a faster rate than anticipated, 3.3%, according to the U.S. Bureau of Economic Analysis (BEA), exceeding market estimates of 2%.
The positive GDP statistics for the current quarter, which came after a robust 4.9% increase in the previous quarter, undermined the case for an early Federal Reserve (Fed) interest rate cut.
The labour market’s resilience, the strength of the United States (US) PMI statistics for January, and strong consumer spending all contributed to the economy’s resilience and caused the Fed to reevaluate possible rate cuts.
Market expectations have changed, as evidenced by the CME Fed watch tool. Which now projects a 42.4% chance of a 25 basis-point interest rate reduce in March.
This adjustment confirms the notion that, given the favourable U.S. economic indicators, a more restricting monetary policy may be unwarranted.
Technically, the market for silver showed a shift towards long liquidation as open interest fell by -0.42% to settle at 26193.
Although prices dropped by -96 rupees, support lies at 71505. If that level is breached, it could test 71230. On the other hand, analysts expect resistance at 72140; a breakthrough there could lead to a test of 72500.