Silver prices experienced a notable increase, closing up by 3.19% at Rs 219,653, driven by rising geopolitical tensions and anticipations of accommodating monetary policy, which spurred significant buying activity. The ambiguity regarding US enforcement measures targeting Venezuelan oil tankers, coupled with operational setbacks at PDVSA due to a cyberattack, has bolstered silver’s status as a safe-haven asset.
The metal has now increased by more than 140% year-to-date, supported by strong industrial demand, ongoing investment inflows, and constricting global inventories. Market expectations are firmly centered on the prospect of two US Federal Reserve rate cuts in the coming year, as Fed officials emphasize the potential for policy easing in light of moderating inflation and a weakening labor market.
Structural fundamentals persist in underpinning prices, as silver mine production and recycling have remained relatively stable for more than ten years, while industrial demand from solar energy, electric vehicles, and data centers is on the rise. The anticipated supply deficit is expected to extend into a fifth consecutive year by 2025, with a projected shortfall of approximately 125 million ounces. Elevated lease rates and borrowing costs in London indicate tight physical conditions, reflecting authentic delivery stress. Chinese silver stockpiles have declined to their lowest levels in a decade, driven by unprecedented export activity. The recent announcement regarding tighter export controls set to take effect in 2026 has prompted a wave of pre-emptive purchasing.
From a technical perspective, the market experienced short covering, as open interest decreased by 4.2% to 12,177 while prices surged by Rs 6,781. Silver exhibits support at Rs 215,380; a breach below this level would reveal Rs 211,105 as the next point of interest. Resistance is identified at Rs 222,210, with a potential upward movement leading prices to Rs 224,765.