Silver concluded the session down 3.06% at Rs 192,851, experiencing a pullback due to profit-taking after reaching an unprecedented high close to 200,000 earlier in the day. The significant adjustment occurred despite the overarching fundamental environment continuing to appear favorable. Earlier in the week, silver found support from the US Federal Reserve’s quarter-point rate cut and a less hawkish policy outlook.
Fed Chair Jerome Powell emphasized that additional rate hikes are improbable, with forecasts indicating one more cut next year and another in 2027, which continues to support precious metals. Investment demand remained resilient, characterized by significant ETF inflows and substantial retail purchasing, which bolstered anticipations of a fundamental market shortfall in the upcoming year.
Concurrently, silver mine production and recycling have exhibited minimal growth for over ten years, as the global supply deficit is anticipated to persist into a fifth consecutive year. The projected shortfall is approximately 125 million ounces by 2025, bringing the total cumulative deficit since 2021 to nearly 800 million ounces. Continued physical market tightness is evident, as indicated by high lease rates in London and a significant reduction in inventories in China. Chinese stockpiles have declined to their lowest level in ten years, as exports reached a historic high of 660 tonnes in October.
From a technical perspective, the market is experiencing long liquidation, as evidenced by a 14.11% decline in open interest to 10,982, coinciding with a price decrease of Rs 6,091. Silver is currently positioned with support at Rs 188,085; a decline beneath this level could lead to a test of Rs 183,310. Resistance is identified at Rs 199,625, and a breakthrough could drive prices toward Rs 206,390.