Silver yesterday settled 1.19% higher at Rs 1,56,321, buoyed by dovish commentary from Federal Reserve officials that reinforced expectations of an imminent US rate cut. Fed Governor Christopher Waller emphasized ongoing weaknesses in the labor market, stating that inflation is “not a big problem,” and indicated that payroll figures might be adjusted downward, which suggests backing for an early rate cut. His remarks reinforced the insights provided by New York Fed President John Williams, who similarly suggested the potential for near-term easing.
These statements realigned market expectations decisively towards an earlier easing of policy. On the supply side, 7.6 million ounces of silver exited COMEX warehouses last week, resulting in inventories declining to 462 million ounces, the lowest level observed since March. In October, LBMA inventories increased to 844 million ounces, marking the highest level in a year, driven by arbitrage opportunities that facilitated the return of metal to London. In October, London vault silver holdings experienced a 6.8% increase, reaching 26,255 tons. This rise alleviated a liquidity squeeze that had been instigated by significant outflows earlier in the month.
Year-to-date silver-backed ETP holdings have increased by 18%, indicative of investor apprehensions regarding stagflation, the sustainability of debt, and geopolitical uncertainties. Global silver demand in 2025 is projected to decrease by 4% year-on-year, reaching 1.12 billion ounces. This decline is attributed to a 2% reduction in industrial demand and a 5% drop in demand related to photovoltaics, primarily due to lower silver loadings.
The market is currently experiencing a phase of short covering, evidenced by a 23.68% decline in open interest to 8,359, alongside a price increase of Rs 1,839. Support stands at Rs 155,050, with potential further decline toward Rs 153,770. Resistance stands at Rs 157,525, with a potential breakout that may elevate prices to Rs 158,720.