Silver prices decreased by 0.7% to close at Rs 147,470, as traders realized profits following a robust rally, amidst apprehensions that the metal may have reached overvaluation. The recent pullback occurred notwithstanding the weaker U.S. CPI data, which bolstered expectations for two Federal Reserve rate cuts this year. In September, headline inflation increased to 3%, falling just short of the anticipated 3.1%. Meanwhile, core inflation experienced a slight decline, bolstering expectations for potential monetary easing.
Recent increases in silver can be attributed to safe-haven inflows, positive sentiment regarding industrial demand from electric vehicles, data centers, and solar sectors, as well as the tightening of inventories on prominent exchanges in London and Shanghai. The market monitored trade-related developments in anticipation of the forthcoming Trump–Xi meeting at the APEC summit. In the interim, substantial deliveries of silver from the United States and China to London have contributed to alleviating a recent liquidity crunch, thereby stabilizing premiums in the spot market.
Global silver ETP holdings increased significantly to 1.13 billion ounces by mid-2025, approaching record levels, indicative of persistent investor demand. Nonetheless, the Silver Institute anticipates a 21% reduction in the global deficit, projecting it to reach 117.6 million ounces this year, attributed to a slight decline in demand coupled with an increase in supply. Additionally, demand for coins and bars is expected to grow by 7% following a significant decrease in 2024.
The market is currently experiencing long liquidation, as evidenced by a 1.56% decline in open interest, bringing it to 20,311. Silver establishes a support level at Rs 145,550; a decline beneath this threshold could lead to a test of Rs 143,630. Conversely, resistance is identified at Rs 148,920, with a potential breakout propelling prices towards Rs 150,370.