Silver prices experienced a notable increase of 1.89% to Rs 1,48,840, driven by technical buying and a weaker U.S. dollar. The prevailing concerns regarding the extended U.S. government shutdown have negatively impacted sentiment, thereby enhancing the demand for safe-haven assets. The Federal Reserve’s 25 bps rate cut, which adjusts the benchmark rate to 3.75–4.00%, coupled with the decision to conclude balance sheet runoff by December 1st, has injected additional liquidity into the market, thereby benefiting non-yielding assets such as silver.
Nonetheless, ambiguity surrounding the U.S.–China trade framework and a recent 6% profit-taking correction constrained more assertive upside positions. In the interim, substantial silver deliveries from the United States and China to London alleviated a liquidity squeeze in the over-the-counter market, where previous shortages had driven prices to a premium relative to U.S. Comex futures. At the close of September, London vaults contained 24,581 tons of silver, with a valuation of $36.5 billion, as per reports.
Investment demand continues to exhibit strength, as evidenced, inflows totaling 95 million ounces during the first half of 2025, thereby elevating total holdings to 1.13 billion ounces, approaching the record levels observed in 2021. The Silver Institute forecasts a 21% reduction in the global silver deficit, bringing it to 117.6 million ounces this year, driven by increased supply and a modest decline in demand. However, demand for coins and bars is anticipated to increase by 7% following a significant drop last year.
Silver is currently experiencing short covering, as evidenced by a 2.02% decline in open interest, bringing it to 19,598 lots. Support is positioned at Rs 1,45,795; a decline beneath this level could see prices testing Rs 1,42,750. Conversely, resistance stands at Rs 1,50,490, and a breach above this threshold may propel prices toward Rs 1,52,140.