Silver dropped on profit booking as investors looked for guidance on inflation

prices experienced a slight decline of -0.39% to settle at 71616 as profit-taking ensued, prompted by the search for guidance on inflation. This dip followed a recent surge driven by escalating tensions in the Middle East, notably the Gaza hospital blast, which drew widespread condemnation across the Arab world. Concurrently, the remained strong, while US Treasury yields reached 16-year highs, driven by remarks from the Federal Reserve. 

Fed Bank of New York President John Williams emphasized the need for restrictive interest rates “for some time” to bring inflation back to the 2 percent target. On the other hand, Fed Governor Christopher Waller suggested it’s premature to gauge if further policy actions are necessary. These comments created uncertainty around the future direction of interest rates and their impact on precious metals like silver. Despite this, the US housing market faced headwinds, with a 2% decrease in existing-home sales in September 2023, marking the fourth consecutive monthly decline and reaching levels not seen since October 2010. 

From a technical perspective, the silver market saw a surge in open interest by 4.99%, settling at 19914, even as prices declined by -279 rupees. Silver’s support is currently at 71080, with potential to test 70545 levels. Resistance is expected at 72175, and a breakthrough could lead to testing the 72735 range. These technical indicators reflect a market influenced by economic and geopolitical developments, with investors closely monitoring central bank policies and inflation concerns to determine silver’s future price trajectory.