Silver prices closed slightly higher by 0.03% on Tuesday, settling at 75,313 rupees per ounce as the dollar maintained its strength and Treasury yields remained near four-month highs ahead of Wednesday’s FOMC rate decision. The recent readings of consumer and producer price inflation, which surpassed expectations, have tempered optimism regarding the likelihood of the Fed‘s first rate cut in June. Despite expectations of a rate cut, the Federal Reserve kept interest rates unchanged within the target range of 5.25%-5.5%, signaling its intention for three rate cuts before the year’s end. Additionally, the Committee notably raised its forecast for this year’s real GDP growth to 2.1%, reflecting improved economic prospects.
The U.S. housing sector showed signs of stabilization, with residential construction surging by 10.7% last month to a 1.521 million annualized rate, surpassing January’s revised rate. Building permits also saw a significant increase, rising by 1.9% to a seasonally adjusted annual rate of 1.518 million in February, marking the highest level since August. The rise in building permits was supported by approvals for both multi-segment and single-family housing, indicating positive momentum in the housing market. Overall, silver’s performance reflects a delicate balance between macroeconomic factors, including monetary policy decisions and economic indicators, and technical considerations. Despite the strength of the dollar and Treasury yields, silver prices managed to hold steady, buoyed by expectations of continued monetary support and positive developments in the housing sector.
From a technical standpoint, the silver market experienced short covering, with a drop in open interest by -1.27% alongside a price increase of 26 rupees. Currently, silver finds support at 74,980 rupees, with potential downside testing at 74,645 rupees. Resistance levels are likely to be encountered at 75,575 rupees, with a breakout potentially leading to prices testing 75,835 rupees.
