Silver prices increased by 0.74% to close at Rs 1,62,467, bolstered by heightened expectations for additional U.S. interest rate reductions. Market sentiment improved following reports indicating that White House economic advisor Kevin Hassett is the frontrunner for the next Federal Reserve chair—an appointment perceived as supportive of a lower-rate policy.
Market participants currently attribute an 85% likelihood to a 25-bps reduction in December, a significant increase from the 30% probability noted just a week prior, alongside anticipations of further reductions extending into 2026. On the supply front, an additional 7.6 million ounces departed from COMEX warehouses last week, resulting in inventories decreasing to 462 million ounces—the lowest level observed since March. In contrast, LBMA inventories experienced a significant increase, reaching 844 million ounces in October, propelled by heightened metal flows to London due to advantageous arbitrage opportunities.
Global tightness remains evident, particularly in China, where stockpiles associated with the SHFE have reached their lowest levels since 2015. In October, Chinese silver exports reached a historic high of 660 tons, significantly bolstering inflows into London. Physical demand has also contributed to support, driven by India’s wedding season and the uncertainty regarding potential U.S. tariffs following silver’s inclusion in the USGS critical minerals list. In October, London vault holdings experienced an increase of 6.8%, reaching a total of 26,255 metric tons, which is valued at $41.3 billion. This development has alleviated some of the previous pressure observed in the OTC market.
From a technical perspective, silver is experiencing short covering, evidenced by a 37.54% decline in open interest to 6,169, coinciding with a price increase of Rs 1,195. Support is established at Rs 1,60,495, with potential further decline towards Rs 1,58,520. Conversely, resistance is noted at Rs 1,64,210; a breach above this level could propel prices to Rs 1,65,950.