Silver experienced a decline of -1.12%, settling at 71306 as traders adjusted their positions amid speculations of potential rate cuts by the Federal Reserve. Federal Reserve Bank of Atlanta President Raphael Bostic’s openness to lowering rates in the coming months, contingent on further data regarding inflation pressures, influenced market sentiment.
Bostic’s comments about normalizing policy in the summer, coupled with the unexpected surge in January’s producer price index, added complexity to the interest rate outlook. Despite a week of disappointing U.S. economic data, policymakers remain committed to a wait-and-see approach on interest rate cuts, acknowledging the challenges posed by the current economic landscape.
Traders, initially anticipating a rate reduction in March, now see a 53% likelihood of a 25bps cut in June, reflecting the evolving sentiment in the market. The upcoming release of FOMC meeting minutes and statements from Fed officials will be closely watched for insights into the timing of the first rate cut.
Technically, the market is undergoing long liquidation, with a -0.46% drop in open interest to 21566, accompanied by a price decrease of -806 rupees. Silver finds support at 71110, with a potential test of 70910 levels below. On the upside, resistance is likely at 71580, and a breakthrough could lead to testing 71850.
