Silver prices declined by 0.24% to Rs 1,81,601, as traders realized profits following the metal’s ascent to a record high. The correction followed a six-session rally that propelled silver prices over 100% in 2025, indicative of robust bullish momentum. Market sentiment, however, remains broadly supportive due to expectations of a 25 basis points U.S. Federal Reserve rate cut, with traders assigning an 88% probability. A series of disappointing U.S. macroeconomic indicators, highlighted by the ninth consecutive month of contraction in manufacturing, has bolstered the argument for monetary easing. On the physical front, global supply constraints persist in supporting prices.
Chinese silver stockpiles have reached their lowest levels since 2015, and trading volumes on the Shanghai Gold Exchange have fallen to a nine-year low. In October, China achieved a historic export of 660 tons of silver, a significant portion of which was rerouted to London to alleviate the liquidity constraints that had resulted in a marked increase in borrowing rates.
London vault holdings increased by 6.8% to 26,255 tons, driven by inflows of 1,674 tons from China and the United States. Nonetheless, liquidity concerns continue to be a significant issue, given that borrowing costs are still at historically high levels. In the interim, 1,568 tons of silver have been extracted from Comex warehouses since the beginning of October, indicating persistent tightness even in the face of increased year-on-year inventories.
From a technical perspective, silver is experiencing long liquidation, as evidenced by a 6.87% decline in open interest, bringing it down to 13,736. Immediate support is identified at Rs 1,78,420, with a potential decline extending to Rs 1,75,240. Conversely, resistance is established at Rs 1,83,730, and a breakout may propel prices to Rs 1,85,860.