Silver prices experienced a notable increase, closing with a rise of 2.62% at Rs 197,901, influenced by constricting inventories, strong industrial demand, and the recent addition of silver to the U.S. critical minerals list. The momentum of demand continues to exhibit notable strength, particularly within the solar, electric vehicle, and data center sectors, thereby bolstering expectations of a persistent structural supply deficit. Further backing was provided by robust ETF inflows and ongoing retail purchases, which aligned with the tightening of physical market conditions subsequent to the most recent U.S. Federal Reserve rate cut.
The Fed’s quarter-point reduction and a less hawkish policy stance have bolstered sentiment, as Chair Jerome Powell indicated that additional rate hikes are improbable and forecasted minimal easing in the coming two years. Concerns on the supply side are increasingly pronounced. Concurrently, silver mine production and recycling have exhibited relative stability over the past decade, whereas industrial demand has experienced a notable increase.
The global silver market is anticipated to experience its fifth consecutive annual deficit, with estimates suggesting a shortfall of approximately 125 million ounces in 2025. This would bring the total cumulative deficit since 2021 to nearly 800 million ounces. Chinese stockpiles have reached decade lows, as inventories linked to Shanghai have experienced a significant decline following record exports exceeding 660 tonnes in October.
From a technical perspective, the market is experiencing new buying activity, as evidenced by an increase in open interest of 0.97% to 11,090, accompanied by a price gain of Rs 5,050. Silver exhibits support at Rs 195,220; a decline beneath this level may challenge Rs 192,540. On the upside, resistance is observed at Rs 200,040, and a sustained move above this level could drive prices toward Rs 202,180.