After the U.S. Federal Reserve tempered its aggressive approach to controlling inflation in a highly anticipated policy statement and signaled that interest rate hikes will soon come to a halt, silver yesterday closed up 1.3% at 70212. However, once U.S. Treasury Secretary Yellen denied that the government had considered protecting all accounts in the U.S. banking sector, a flight to precious metals continued.
Silver prices were supported on the supply side by consistent outflows in bullion inventories. In accordance with projections and driving borrowing prices to new 2008 highs, the Bank of England increased its benchmark bank rate by 25 basis points to 4.25% during the meeting in March 2023.
The goal of the central bank is to maintain financial stability while addressing the high inflation that is still in the double digits and unexpectedly increased last month. The UK’s annual inflation rate nudged up last month from 10.1% to 10.4%, the first increase in four months. Due to improved secondary income receipts and a rise in the services surplus, the U.S. current account deficit was reduced in the fourth quarter.
Technically, the market is experiencing new buying as open interest increased by 6.78% to settle at 13911 while prices increased by 903 rupees. Currently, silver is receiving support at 69654, and a move below that level could result in a test of the 69096 levels. Meanwhile, resistance is now likely to be seen at 70516, and a move above that level could result in prices testing 70820.
