Silver prices decreased by 1.87%, closing at Rs 203,565, as the market experienced profit-taking following a significant recent rally fueled by constrained inventories and strong demand fundamentals. The metal previously benefited from robust ETF inflows, ongoing retail purchases, and its designation on the U.S. critical minerals list, bolstering anticipations of a continued supply shortfall.
Industrial demand continues to be a fundamental component, driven by solar panels, electric vehicles, electronics, and data-center infrastructure, whereas mine production and recycling have largely remained stagnant for more than ten years. The global silver market is projected to experience its fifth consecutive annual deficit in 2025, estimated at approximately 125 million ounces, which would bring the cumulative shortfall since 2021 to nearly 800 million ounces.
Supply-side concerns have intensified following a decline in Chinese stockpiles, which have reached their lowest level in a decade, prompting significant shipments to London to alleviate a squeeze. China’s declaration of stringent silver export controls set to take effect in 2026 has intensified pre-emptive purchasing activities. Simultaneously, the high lease rates in London reflect a true scarcity in physical availability.
Silver is currently experiencing renewed selling pressure, as evidenced by a 9% increase in open interest to 12,888 contracts, despite a price decline of Rs 3,870, indicating a build-up of short positions. The metal currently exhibits immediate support at Rs 201,140; a breach of this level may lead prices to test Rs 198,715. On the upside, resistance is identified at Rs 206,525, and a decisive move above this threshold could pave the way toward Rs 209,485.