Silver prices experienced a notable increase, closing with a rise of 2.39% at Rs 208,439, influenced by constricting inventories, robust industrial demand, and its designation on the U.S. critical minerals list. Strong ETF inflows and continued retail purchasing have contributed additional momentum, bolstering expectations of a persistent supply deficit in the years ahead. Industrial consumption of solar panels, electric vehicles, and data-center infrastructure is on the rise, whereas global mine production and recycling have experienced minimal growth for more than ten years.
The silver market is poised to experience its fifth consecutive annual deficit, projected to reach approximately 125 million ounces in 2025, which would bring cumulative shortages since 2021 to nearly 800 million ounces. Evidence of supply-side stress is apparent in the increasing lease rates and borrowing costs for physical silver in London, indicating a real tightness in delivery. China’s declaration of stringent silver export restrictions set to take effect in 2026 has prompted a surge in preemptive purchasing, coinciding with domestic inventories plummeting to their lowest point in ten years.
Inventories at the Shanghai Futures Exchange have reached their lowest levels since 2015, coinciding with unprecedented Chinese exports exceeding 660 tonnes in October. Despite the LBMA data indicating a 3.5% monthly increase in London silver vault holdings, liquidity continues to be constrained and borrowing costs remain high.
From a technical perspective, the market is experiencing short covering, evidenced by a 6.41% decline in open interest to 12,112, while prices increased by Rs 4,874. Immediate support is positioned at Rs 204,525, with additional downside risk extending toward Rs 200,615. On the upside, resistance is observed at Rs 210,475, and a sustained movement above this threshold may lead to further gains towards Rs 212,515.