Silver prices yesterday concluded with an increase of 0.71% at Rs 145744, bolstered by anticipations of additional US rate reductions and safe-haven purchases in light of persistent government shutdown apprehensions. Weak macroeconomic data further supported sentiment, as the ISM Services PMI declined significantly to 50 in September from 52 in August, indicating stagnation in the services sector. ADP employment data revealed an unexpected decline of 32,000 jobs, contrasting with forecasts predicting a gain of 50,000.
This development underscores indications of labor market weakness and strengthens expectations for further easing of Federal Reserve policy. Nonetheless, prudence persisted as Federal Reserve officials cautioned against hastening actions in light of ongoing inflationary threats. From the supply-demand perspective, silver received support from the Silver Institute’s forecast of a global deficit for the fifth consecutive year in 2025. The report projects production at 844 million ounces, which remains approximately 100 million ounces below the level of demand.
Retail investment trends exhibited divergence, as Europe experienced a modest recovery from a low base, while India recorded a 7% year-on-year increase in demand, driven by robust price expectations. The Silver Institute observed that the 2025 deficit may contract by 21% as a result of marginally increased supply and diminished demand. However, demand for coins and bars is projected to recover by 7% following significant declines in 2024.
Silver is experiencing new buying activity, as indicated by a 1.63% increase in open interest to 18,063, coinciding with a price increase of Rs 1024. Support is identified at Rs 142815, with a breach below potentially leading to Rs 139880, whereas resistance is positioned at Rs 147830, and an upward movement could further enhance gains towards Rs 149910.