prices experienced a marginal decline of -0.05%, settling at 75386, primarily driven by profit booking. The market had earlier witnessed an upward trend due to a weakened dollar and lower yields, fueled by expectations of the Federal Reserve initiating a rate-cutting cycle in March. The latest US data reinforced the belief in the Fed’s potential rate-cutting strategy, as both headline and core PCE price indices for November fell below estimates. The US inflation data suggested a gradual convergence toward the Fed’s target, with year-ahead inflation expectations reaching a near three-year low of 3.1% in December 2023.
Factors such as falling energy prices and the impact of interest rate hikes contributed to the decline. Despite the decline in mortgage rates, sales of new single-family houses in the US recorded a sharp drop of 12.2% in November, marking the steepest decline since April 2022. This unexpected development occurred even with a notable rebound in mortgage demand, indicating challenges in the real estate sector. Silver prices continue to find support from a supply-demand imbalance, with demand consistently outpacing supply. The silver market is expected to face a deficit of 140 million ounces (4354 tonnes) in 2023, reinforcing the positive outlook for prices.
From a technical standpoint, the market observed fresh selling, with a 0.99% increase in open interest, settling at 15,122. Silver is currently finding support at 74995, and a breach below could test 74605 levels. On the upside, resistance is likely at 75910, and a move above could propel prices toward 76435.
