Silver prices increased by 1.22%, closing at Rs 1,47,519, bolstered by safe-haven demand in the context of the ongoing US government shutdown and heightened expectations for additional Federal Reserve rate cuts. The inability of legislators to finalize a funding agreement has postponed the release of crucial economic indicators, such as the September employment report, thereby intensifying conjecture regarding a potential quarter-point interest rate reduction in October, with an additional cut anticipated in December.
Market participants are closely monitoring remarks from Fed Governor Stephen Miran and Chair Jerome Powell for further guidance on policy direction. On the fundamentals front, silver has garnered support from tightening global supply conditions, as the Silver Institute anticipates a fifth consecutive market deficit in 2025. UBS has adjusted its silver price forecasts to USD 52 and USD 55 per ounce by mid-2026, attributing this revision to strong investor interest, geopolitical tensions, and macroeconomic uncertainty.
In the first half of 2025, silver-backed ETPs experienced net inflows totaling 95 million ounces, resulting in global holdings reaching 1.13 billion ounces, which is merely 7% shy of the peak observed in 2021. In India, retail investment demand experienced a 7% year-on-year increase, indicative of robust price expectations, whereas Europe demonstrated a slight recovery from previously diminished levels. The anticipated global silver deficit is projected to decrease by 21%, reaching 117.6 million ounces this year, driven by a slight increase in supply and a modest moderation in demand.
The market is currently experiencing new buying activity, as evidenced by a 12.2% increase in open interest, reaching 20,574 lots. Silver exhibits support at Rs 1,46,505; a decline beneath this level may prompt a test of Rs 1,45,490. Conversely, resistance is identified at Rs 1,48,255, with a breakout above this threshold potentially driving prices toward Rs 1,48,990.