Silver prices declined by 0.43% to Rs 154,644, influenced by a stronger US dollar and reduced expectations regarding a forthcoming Federal Reserve rate cut. The initial jobless claims reported in the first US labor market update following the extended government shutdown stood at 232,000, significantly exceeding recent averages and underscoring ongoing uncertainty in the economic landscape. Fed Governor Waller emphasized the necessity of an additional 25 bps rate cut to mitigate the impact of declining labor indicators, pointing to sluggish hiring, muted wage growth, and lackluster consumer sentiment.
From a fundamental perspective, the peak wedding season in India has bolstered physical demand, whereas apprehensions regarding possible US tariffs have contributed to a sense of unease in the global market. Silver holdings in London vaults increased by 6.8% to 26,255 tons, supported by significant inflows from the US and China, which contributed to alleviating October’s liquidity squeeze. Meanwhile, ETP holdings surged 18% year-to-date, reflecting rising investor interest amid concerns regarding stagflation, fiscal stress, and geopolitical risks.
Notwithstanding this, global silver demand is projected to decline by 4% year-on-year in 2025, reaching 1.12 billion ounces, primarily driven by weaker industrial consumption, as well as reduced demand for jewelry and bar-coin purchases. Industrial demand is projected to reach 665 Moz, influenced by economic uncertainty and ongoing thrifting, despite photovoltaic installations achieving record levels.
From a technical perspective, the market is experiencing long liquidation, evidenced by a 3.57% decrease in open interest to 12,423, coinciding with a price decline of Rs 668. Silver currently has support at Rs 152,120; a breach of this level would lead to a potential decline towards Rs 149,600. Resistance is established at Rs 156,040, and a sustained movement above this threshold may initiate an ascent toward Rs 157,440.