Silver prices fell by 1.54% to settle at ₹83,252 as markets digested recent economic data to gauge the potential magnitude of rate cuts by the Federal Reserve in its upcoming cycle. The Core PCE price index, the Fed's preferred inflation gauge, increased by 0.2% in July, aligning with expectations and keeping rate-cut bets intact. The market anticipates a total of 100 basis points in cuts across the Fed's remaining meetings this year, reflecting a cautious outlook amid stable inflation data. Meanwhile, the U.S. labour market continues to show signs of slowing down, with fewer Americans filing for unemployment benefits last week, though re-employment opportunities are becoming scarcer. Despite this, the economy remains on track for growth, supported by stronger-than-expected GDP figures.
The U.S. economy expanded at an annualized rate of 3.0% in the second quarter, driven by robust consumer spending and a rebound in corporate profits, helping to sustain the economic expansion. India's silver imports are poised to nearly double this year, fuelled by rising demand from the solar panel and electronics industries, along with investor interest in the metal as a potential outperformer compared to gold. In the first half of 2024, India's silver imports surged to 4,554 tons from just 560 tons a year earlier, reflecting strong stockpiling by industrial buyers amid concerns about rising prices.
Technically, the silver market is experiencing fresh selling pressure, with open interest rising by 8.13% to settle at 32,394 contracts. Silver is currently supported at ₹82,465, with a potential downside test at ₹81,685. Resistance is expected at ₹84,260, and a move above this level could lead to prices testing ₹85,275.