Silver yesterday settled higher by 1.69% at Rs 1,62,206, supported by a historic short squeeze and tightening liquidity in the London market, which forced traders to cover short positions amid soaring lease rates that jumped over 30%. The sudden surge in rollover costs made it expensive to hold short bets, adding further upward pressure on prices.
Strong physical demand from India also contributed to the rally, as buyers rushed to secure supplies amid earlier shipments diverted to New York on tariff concerns. Geopolitical uncertainty surrounding a potential Trump-Xi meeting in South Korea and expectations of further U.S. Federal Reserve rate cuts this year continued to underpin precious metals. Investment sentiment remained robust, with global silver ETP holdings rising to 1.13 billion ounces by mid-2025—just 7% below the 2021 peak—while their total value crossed a record $40 billion in June.
Indian retail investment demand climbed 7% year-on-year in the first half of 2025, reflecting strong price optimism. Meanwhile, the global silver deficit is projected to narrow by 21% to 117.6 million ounces this year as demand dips slightly and supply expands. Industrial demand is expected to remain steady after hitting a record in 2024, while coin and bar demand is forecast to rebound 7% after last year’s steep decline.
Technically, the market is under short covering, with open interest falling 5.06% to 25,557 contracts. Immediate support lies at Rs 1,60,460 and Rs 1,58,720, while resistance is seen at Rs 1,63,240, with a breakout likely to test Rs 1,64,280.