Silver experienced a significant increase yesterday, climbing 3.14% to finish at Rs 1,59,504, driven by a historic short squeeze and a contraction in liquidity within the London market, prompting traders to seek physical supply on a global scale. Lease rates in London surged by more than 30%, increasing the expense of sustaining short positions, while robust physical demand from India further constrained global supply.
The increase occurred subsequent to prior deliveries to New York, driven by apprehensions related to tariffs. Geopolitical uncertainty regarding the prospective meeting between Trump and Xi in South Korea has contributed to an increase in safe-haven buying interest. Anticipations surrounding an additional rate cut by the U.S. Federal Reserve this month, along with the potential for another in December, persist in bolstering the precious metals market. Investment demand continues to exhibit strength, as global silver ETP inflows reached 95 million ounces in the first half of 2025, elevating total holdings to 1.13 billion ounces — a mere 7% below the peak observed in 2021. The value of these holdings exceeded $40 billion for the first time.
Retail demand exhibited divergent trends, maintaining robust performance in India with a 7% year-over-year increase, whereas Europe’s recovery progressed at a measured pace. The Silver Institute projects that the global silver deficit will contract by 21%, reaching 117.6 million ounces in 2025, attributed to a modest increase in supply coupled with a decrease in demand.
The market is currently experiencing renewed buying activity, as evidenced by a notable increase in open interest of 11.71%, reaching 26,850 lots, alongside a price rise of Rs 4,859. Silver currently has support levels at Rs 1,54,840 and Rs 1,50,180 beneath that, while resistance is identified at Rs 1,63,430, with a possible test of Rs 1,67,360 in the event of a breakout.