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Silver: Down for the third day ahead of reciprocal tariffs 

 

Performance

 

On April 1, silver traded between $33.46 and $34.22 

 

Silver prices rose nearly 18 per cent in Q1 2025 as the it rallied around 3 per cent last week.

 

On Tuesday, the metal closed with a loss of around 0.95 per cent at $33.72, its third straight loss, as traders remain wary over the reciprocal tariffs scheduled to be announced at 4 PM Eastern Time, Wednesday.

 

Data roundup

 

US data released on Tuesday were largely disappointing as JOLTs job openings fell from 7762K in January to 7568K in February (forecast 7658K). ISM manufacturing (March) came in at 49 (estimate 49.50), the first contraction this year whereas prices paid jumped to from 62.40 to 69.40, hottest reading since June 2022 as new orders and employment contracted more than expected. Stagflation concerns are rising on weak US data amid inflationary pressure. 

 

HCOB Eurozone manufacturing PMI (March final) at 48.60 was a tad lower than the median estimate of 48.7. Eurozone's CPI rose was up 0.6 per cent m-o-m that matched the estimate whereas core CPI rose 2.4 per cent y-o-y as against the forecast of 2.5 per cent. Eurozone's unemployment rate fell from 6.2 per cent in January to 6.1 per cent in February. China's Caixin manufacturing PMI at 51.20, highest since November, topped the estimate of 50.60 and showed an improvement over the prior data of 50.80. S&P Global UK manufacturing PMI (March final) came in at 44.90 (estimate 44.60), whereas Jibun Bank Japan manufacturing PMI (March final) was noted at 48.40, a slight improvement over the prior data of 48.30. 

Read: Gold strategy on April 2: Support at Rs 89,000; Resistance at Rs 92,000

 

Upcoming data

 

Today's major data include US ADP employment change (March), factory orders (February) and durable goods orders (February final).

 

US Dollar and yields

 

US 10-year yields fell to 4.1309, lowest since March 4, before settling 1.16 per cent down at 4.16 per cent. Two-year US yields at 3.875 per cent were down 0.29 per cent on the day.

 

The US Dollar Index closed with a gain of 0.02 per cent at 104.23.

 

Upcoming event

 

The US Fed Chair Powell will speak on economic outlook at the Society for Advancing Business Editing and Writing (SABEW) Annual Conference on April 4.

 

Silver ETF holdings

 

Total known global silver ETF holdings were noted at 719.683Moz as on March 31. Silver ETF holdings have risen for three straight weeks and are up around 0.5 per cent this year.

 

COMEX silver inventory

 

COMEX silver inventory at 475.358MOz remains at a record high due to delivery demand.

 

Gold/Silver ratio

 

Gold/silver ratio has surged to 92.50, highest since September 2022 as silver continues to lag on economic concerns, more so as trade frictions mar the global economic outlook.

 

Outlook

 

Silver may trade with a slight bearish tilt ahead of the US tariff announcement as there is a lot of uncertainty around reciprocal tariffs, though wider markets are somewhat hopeful that tariffs may not be as severe as being feared. Overall, fundamental picture continues to remain constructive on economic and political uncertainties.

 

Dips should be bought for a possible target of $35 (MCX May Silver Rs 103,500) in the coming days.

 

Support is at $33.46 (Rs 99,000)/$32.80 (Rs 97,000). Interim resistance is at 34.60 (Rs 102,500).

 

(Disclaimer: Praveen Singh is an associate VP of fundamental currencies and commodities at Mirae Asset Sharekhan. Views expressed are his own.)