Silver prices experienced a notable increase of 5.42%, reaching Rs 1,74,981, driven by an increasing belief in the likelihood of additional interest rate cuts by the US Federal Reserve. Market expectations for a 25 basis point cut in December have surged to 85%, an increase from 39% just a week prior, with three additional cuts anticipated by the end of 2026. Sentiment improved following reports that Kevin Hassett, who aligns with President Trump’s inclination towards lower rates, is the leading candidate to assume the role of the next Fed Chair. Since October, silver has consistently approached all-time highs, influenced by global economic uncertainty, expectations of lower interest rates, and constricted physical supplies.
COMEX inventories experienced a significant reduction, with 7.6 million ounces exiting warehouses, resulting in total stocks of 462 million ounces, the lowest level recorded since March. In the interim, LBMA inventories increased to 844 million ounces, marking the highest level in a year, driven by arbitrage flows transferring metal from COMEX to London. Physical demand continues to exhibit strength: India’s wedding season is enhancing consumption, while prospective US tariffs on silver introduce an additional layer of uncertainty. China’s silver ecosystem is experiencing significant pressure, as SHFE stocks have reached their lowest levels since 2015, while SGE volumes have fallen to a nine-year low.
In October, Chinese exports reached an unprecedented 660 tons, exacerbating the constraints on domestic liquidity. London vault holdings increased to 26,255 tons, reflecting a 6.8% month-over-month rise, supported by substantial inflows of silver from the US and China that alleviated a significant liquidity crunch.
From a technical perspective, there is clear evidence of fresh buying, as open interest increased by 4.63% to 16,095, accompanied by a price rise of Rs 8,994. Support is identified at Rs 1,69,475, with a potential decline to Rs 1,63,975 if this level is breached. Resistance stands at Rs 1,77,980, and a breakout could potentially lead to gains extending toward Rs 1,80,985.