Silver prices experienced a modest increase, closing 0.3% higher at Rs 155,107, as a risk-averse sentiment permeated global markets, bolstering demand for safe-haven assets. Minutes from the latest FOMC meeting indicated a split within the Federal Reserve, as certain officials supported an October rate cut, while others advocated for maintaining current rates. The increase in unemployment benefit claims to a two-month high, coupled with subdued economic indicators, has bolstered Fed Governor Christopher Waller’s argument for an additional quarter-point cut in the upcoming month.
Political uncertainty has escalated following President Trump’s confirmation of ongoing interviews for a new Fed chair, with a decision anticipated by the end of the year. Physical factors also bolstered prices. Robust demand during the wedding season in India, coupled with apprehensions regarding possible US tariffs on silver, has enhanced market sentiment. In the interim, data indicated that silver holdings in London vaults increased by 6.8% in October, reaching 26,255 tonnes. This development has alleviated the tightness in the OTC market following substantial inflows from the US and China.
Notwithstanding this, borrowing rates continue to be historically high. Investor appetite remains robust, as evidenced by a notable 18% increase in global silver-backed ETP holdings year-to-date. This trend underscores prevailing concerns regarding stagflation, the independence of the Federal Reserve, debt sustainability, and ongoing geopolitical tensions. Global silver demand for 2025 is projected to decrease by 4%, reaching 1.12 billion ounces, attributed to declines in the industrial, jewelry, and investment sectors.
The market is currently experiencing short covering, evidenced by a 1.98% decline in open interest, which now stands at 12,182. Support is positioned at Rs 152,665, with additional declines anticipated toward Rs 150,225. Resistance stands at Rs 158,305, and a breakout may propel prices towards Rs 161,505.