Silver prices surged 5.58% to close at Rs 1,54,645, achieving a new all-time high, driven by strong safe-haven demand in the context of escalating U.S.-China trade tensions, global political instability, and anticipations of additional rate cuts by the U.S. Federal Reserve. The rally accelerated following U.S. President Donald Trump’s threat to impose 100% tariffs on Chinese goods in reaction to Beijing’s rare earth export restrictions, although he subsequently indicated a readiness to engage in negotiations with China.
Wider geopolitical uncertainties, such as the extended U.S. government shutdown, political unrest in France, and leadership instability in Japan, have intensified investor interest in precious metals. The anticipation of successive 25-basis point reductions in the Federal Reserve’s interest rate this year, coupled with a constricted physical supply of silver in London, has contributed to an optimistic outlook. The persistent demand for silver from both industrial and investment sectors, especially in renewable energy applications, has sustained elevated consumption levels.
A supply deficit is anticipated for the fifth consecutive year in 2025. In the first half of 2025, silver ETPs experienced substantial inflows amounting to 95 million ounces, resulting in global holdings reaching 1.13 billion ounces, the highest level observed since early 2021. Indian retail investment demand increased by 7% year-on-year, indicating robust price expectations.
From a technical perspective, the market is experiencing short covering, evidenced by a significant decline in open interest of 17.49% to 23,705 lots, while prices have increased by Rs 8,179. Support is currently positioned at Rs 1,50,135, beneath which prices may approach Rs 1,45,620. Conversely, resistance is identified at Rs 1,57,130; a breach above this level could propel prices towards Rs 1,59,610.