Silver yesterday concluded the session with a decline of -0.47% at 128,820, as profit-taking occurred after recent increases, with investors adjusting their positions ahead of the anticipated 25 basis point rate cut by the US Federal Reserve this week. The current market sentiment reflects a strong anticipation of this reduction, with projections indicating a 67 basis point easing by the end of the year, bolstered by recent data showing a cooling labor market in the US and low inflation levels.
US President Donald Trump has increased pressure on Fed Chair Jerome Powell for a more significant reduction, pointing to vulnerabilities in the housing market. In the meantime, significant central banks like those in Canada and China are anticipated to adopt a more accommodative stance, whereas Japan and the UK are expected to uphold their current policies. The demand for silver in industrial applications continues to be strong, propelled by industries like solar energy, electric vehicles, and electronics. This dynamic is tightening the physical silver market and bolstering prices in the face of supply limitations. Investments in silver ETPs have experienced a remarkable increase, with net inflows reaching 95 million ounces in the first half of 2025, exceeding the total for the entirety of the previous year.
Retail investment continues to show resilience, marked by a 7% year-on-year growth in the first half of 2025. In contrast, European retail investment is on a path to recovery, yet it still falls short of previous high levels. The anticipated global silver deficit is projected to decrease by 21% in 2025, driven by a rise in supply and a decline in demand, while industrial consumption remains stable. The market is currently experiencing a phase of long liquidation, evidenced by a 6.13% decline in open interest, bringing it down to 17,168. Silver currently has support at 127,900, and a further test of 126,985 may be on the horizon. Resistance is positioned at 130,090, and a consistent advance beyond this level may aim for 131,365.
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