Silver declined by 0.91% to Rs 181,742 as traders realized profits following last week’s record highs, with markets now adjusting in anticipation of the expected US Federal Reserve rate cut. Despite the pullback, sentiment remains broadly supported as silver benefits from tightening physical conditions, including low visible inventories, strong ETF inflows, and sustained industrial demand from solar and green technologies.
Global silver-backed ETFs experienced an increase of approximately 200 tons, elevating their holdings to the highest level observed since 2022. Last month, a considerable amount of silver was transported to London, resulting in a constriction of supplies in alternative markets, while inventories at the Shanghai Futures Exchange fell to their lowest levels in ten years.
Chinese exports reached an unprecedented 660 tons in October, highlighting significant domestic drawdowns. Global liquidity concerns remain pronounced, characterized by heightened borrowing costs in London and the continuous assessment of potential US tariffs following silver’s designation on the USGS critical minerals list. Data indicated that silver stocks in London vaults increased by 3.5%, reaching a total of 27,187 tons in November.
On the macroeconomic front, US data exhibited a broadly stable trend. The PCE index increased by 0.3% month-over-month, aligning with forecasts, as personal spending also advanced by 0.3% and income saw a rise of 0.4%, indicating a stable demand landscape. Silver continues to experience long liquidation, evidenced by a 1.74% decline in open interest. Robust support is established at Rs 180495, with the potential for a test of Rs 179250 should this level be breached. Resistance stands at Rs 183140, and a breakout may propel prices towards Rs 184540.