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Will Silver prices fall more? Check outlook, key levels & trading strategy
Silver: Buy the dips with stop-loss below $32.50
Silver Performance:
Spot silver declined for the second consecutive day on May 27 amid easing trade tensions following US President Donald Trump's delay in proposed 50 per cent tariff on Europe from June 1 to July 9.
Risk appetite was boosted further on speculation that Japan will try to cap rise in long-term yields. The Japanese Finance Ministry sent a questionnaire to market participants regarding appropriate issuance amounts for government bonds. It is to be noted that Japan's long-term yields soared to record highs last week after a sale of 20-year debt got the weakest demand in more than a decade.
Decline in yields globally supported risk assets and weighed on precious metals in turn.
US Dollar Index and yields:
10-year US Treasury yields were at 4.43 per cent, down nearly 1.8 per cent on Tuesday, as global yields fell. Thirty-year US yields fell nearly 2 per cent to 4.93 per cent, moving back below the 5-per cent mark after three days.
The US Dollar Index, at 99.54, was up around 0.6 per cent on the day.
Data roundup:
US data released on Tuesday were largely positive for the US Dollar as durable goods orders (April prel.) came in at -6.3 per cent that beat the forecast of -7.8 per cent. Similarly, durables, ex-transport, came at 0.2 per cent and topped the estimate of 0 per cent. However, prior data were revised lower. FHFA House Price Index rose 0.1 per cent M-o-M in March, which trailed the forecast of 0.1 per cent. Conference Board Consumer Confidence (May) rose 98, the highest since February and topped the median estimate of 87.10. US consumer confidence rebounded from a near five-year low on improving economic outlook amid tariff truce talks.
Upcoming data:
Traders will look forward to FOMC minutes (May 7 meeting).
That apart, today's Richmond Fed manufacturing Index (May) and Dallas Fed Services Activity (May) will be released in the US today. However, major focus will be on the US GDP (Q1 secondary reading), personal consumption (Q1 secondary reading), and weekly job data to be released on May 29.
Silver ETF holdings:
Total known global silver ETF holdings at 740.63MOz are currently at the highest level since November 2024 as ETFs recorded a net inflow of around 8MOz in the last two weeks. Silver ETF holdings are up 3.33 per cent YTD, which is an encouraging sign.
Silver Jewellery demand:
As per Silver Institute, silver jewellery demand grew by 3 per cent to 208.7 million ounces in 2024 on pickup in India, driven by an import duty cut, a healthy rural economy, and the ongoing rise in purities.
As per a Silver Institute survey of US jewellery retailers, 53 per cent retailers reported marginal increase in silver sales over the last survey period in 2022 as silver jewellery maintained the best margin in holiday season. Affordability emerged as the best reason behind silver jewellery demand.
COMEX silver inventory:
Presently, COMEX silver inventory stands at 496.695MOz, down around 1.8 per cent.
from the record high level of 505 MOz recorded on May 12.
CFTC data:
Money managers boosted their bullish bets to 3-week high in the week ending May 20. Short-only total rose to the highest in seven weeks.
Silver Outlook:
Improvement in risk appetite due to President Trump delaying European tariffs and stabilising bond yields are likely to support the metal. However, reduced safe demand will cap the gains.
Spot silver is expected to trade between $32.50 (₹95,500) and $33.50 (₹98,500) in the near-term.
It is advisable to buy the dips as ETF inflows are turning encouraging.
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Time of India
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