Silver yesterday concluded the trading session with an increase of 1.81%, reaching Rs 1,44,720, as investors assessed the prevailing political and monetary uncertainties in the United States. Precious metals experienced support earlier this week following the U.S. government shutdown, which marked the first occurrence in nearly seven years and resulted in the postponement of critical economic data, including the September nonfarm payrolls report.
The ADP employment data revealed an unexpected decline of 32,000 jobs, contrasting with forecasts of a 50,000 increase. This development indicates a potential softening in the labor market and heightens anticipations for additional rate cuts by the Federal Reserve, although officials continue to exercise caution due to persistent inflationary pressures. On the supply-demand front, silver gained momentum due to deficit concerns, as the Silver Institute forecasts a global shortfall for the fifth consecutive year in 2025.
Production is projected to reach 844 million ounces, falling nearly 100 million ounces short of demand. Investment inflows continue to exhibit robustness, as silver ETP holdings attained 1.13 billion ounces by June, nearing record levels, while their value exceeded $40 billion for the inaugural occasion. The global silver deficit is anticipated to decrease by 21% to 117.6 million ounces this year, bolstered by increased supply and a slight decline in demand. However, industrial demand is expected to hold steady following record highs in 2024.
From a technical perspective, the market is experiencing short covering, evidenced by a decline in open interest of -13.46% to 17,768, alongside a price increase of Rs 2,575. Silver is currently finding support at Rs 1,42,885; a decline below this level may lead to a test of Rs 1,41,050. Conversely, resistance is identified at Rs 1,46,135, and a breakthrough above this threshold could propel prices towards Rs 1,47,550.