Silver prices remained under pressure after witnessing a steep correction from last week’s record highs, with MCX Silver July futures tumbling nearly Rs 40,000 from peak levels amid aggressive profit booking in global precious metals markets.
Last week, international spot silver prices rallied above $89 per ounce, while MCX silver futures surged to an all-time high of Rs 3,04,891 per kg. However, the rally reversed sharply as stronger US Treasury yields, persistent inflation concerns and broad-based dollar strength weighed on bullion sentiment.
On Tuesday, MCX Silver July futures slipped to an intraday low of around Rs 2,64,949, marking a decline of nearly Rs 40,000 from the record peak.
According to a report by Kotak Neo , the immediate support for MCX Silver July futures is placed at Rs 2,91,423, followed by Rs 2,88,460 and Rs 2,78,867. Resistance levels are seen at Rs 3,01,017, Rs 3,03,980 and Rs 3,13,573.
In the international market, spot silver support is placed at $85.24 per ounce, followed by $84.28 and $81.18, while resistance levels are pegged at $88.35, $89.31 and $92.41.
Kotak Neo said spot silver initially rallied above the $89-per-ounce mark before ending more than 5% lower for the week near $76, with prices correcting over 14% from weekly highs as rising yields and expectations of a potential Federal Reserve rate hike triggered heavy selling pressure.
“Persistent supply tightness, geopolitical risks and resilient industrial consumption continue supporting the broader market outlook,” the brokerage said.
The report added that supply-side concerns continue to underpin long-term sentiment in silver markets, particularly after geopolitical tensions disrupted global base metal production. Since silver is largely produced as a byproduct of copper and other industrial metals, fears of tighter supply chains supported the earlier rally.
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Kotak Neo noted that the global silver market is heading into its sixth consecutive year of structural supply deficit. Physical market indicators also reflected tightening supplies, with COMEX registered silver inventories standing at 80.8 million ounces against open interest of 514.8 million ounces.
Meanwhile, LBMA data showed an estimated free float of just 234.7 million ounces after ETF allocations. The brokerage also highlighted that strong physical premiums in Shanghai and India continue to indicate robust industrial and investment demand across Asian markets.
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