Silver yesterday concluded the trading session with an increase of 0.85% at Rs 1,43,099, influenced by a depreciation of the dollar in the context of escalating concerns regarding a possible US government shutdown. Investor caution was evident in anticipation of significant US economic releases this week, as data indicated that inflation pressures persisted at a stable level, thereby bolstering expectations for additional monetary easing by the Federal Reserve. Current market expectations indicate a 90% likelihood of a rate cut in October, alongside approximately 65% odds for an additional cut in December, thereby providing ongoing support for bullion.
On the fundamental front, silver demand is underpinned by strong industrial consumption, especially from sectors such as solar energy, electric vehicles, and electronics. Industrial consumption has surpassed 700 Moz and is on an upward trajectory. Supply, however, remains constrained, as silver is largely produced as a byproduct of other metals, with global mine output in 2025 estimated at 844 Moz, which is insufficient to offset the persistent structural deficit. The Silver Institute anticipates a fifth consecutive annual shortfall this year, with demand projected to surpass supply by over 100 Moz.
Investment activity further suggests a positive outlook. In the first half of 2025, inflows into silver ETPs reached 95 million ounces, resulting in global holdings of 1.13 billion ounces, nearing record levels. Retail demand exhibits a heterogeneous landscape, characterized by Europe’s recovery from a historically low baseline and a notable 7% year-over-year increase in Indian demand, indicative of robust price expectations.
Silver is experiencing new buying activity, as evidenced by a 13.53% increase in open interest, reaching 19,373 contracts. Immediate support is positioned at Rs 1,41,840; a decline below this level could lead to a test of Rs 1,40,590. Conversely, resistance is identified at Rs 1,44,260, and a breakout above this threshold may pave the way towards Rs 1,45,430.