Silver yesterday settled higher by 1.13% at Rs 1,35,062, reaching a new all-time high of Rs 1,35,500 as expectations of additional U.S. interest rate cuts and a weaker dollar supported market sentiment. The Federal Reserve has recently lowered interest rates and suggested the possibility of further easing in the future, attributing this decision to observed weaknesses in the labor market. Policymakers continue to exhibit a lack of consensus, as certain Federal Reserve officials advocate for a cautious approach in light of indications that inflation is stabilizing.
In contrast, newly appointed Governor Stephen Miran has called for more significant cuts, highlighting potential risks to the labor market. Investors are currently anticipating Fed Chair Jerome Powell’s remarks and the forthcoming PCE inflation data for more definitive signals regarding monetary policy.
Fundamentals continue to provide support, as robust industrial and investment demand sustains price levels. Demand for silver from the solar, electric vehicle, and electronics sectors persists, providing ongoing structural support. Investment inflows into silver-backed exchange-traded products reached 95 Moz in the first half of 2025, elevating global holdings to 1.13 Boz, merely 7% below the record set in February 2021. Retail investment demand exhibits mixed trends — strong in India, where it increased by 7% year-on-year, yet remains subdued in Europe despite a slight recovery.
Silver is currently experiencing short covering, as evidenced by a -7.13% decline in open interest to 17,374, coinciding with a price increase of Rs 1,507. Immediate support is positioned at Rs 1,33,590; a breach of this level may lead to a test of Rs 1,32,125. Conversely, resistance is identified at Rs 1,36,110. A decisive break above may drive prices towards Rs 1,37,165.