Silver prices experienced a correction yesterday, closing down by 1.6% at Rs 3,18,492. This movement was primarily attributed to profit booking, as a slight alleviation in immediate geopolitical risks diminished the necessity for assertive defensive strategies. The recent pronounced increases have rendered the market susceptible to a phase of consolidation. Nonetheless, the drawbacks were constrained owing to enduring physical tightness and the prevailing geopolitical uncertainty. The renewed initiative by US President Donald Trump to acquire Greenland, coupled with his unwillingness to dismiss the potential use of force, sustains the underlying demand for safe-haven assets, as Europe contemplates possible countermeasures. At its core, silver remains bolstered by underlying structural deficits.
The global market has experienced four consecutive years of supply shortfall, characterized by demand consistently surpassing both mine and scrap supply. At the conclusion of December 2025, silver reserves in London vaults reached 27,818 tonnes, reflecting a month-on-month increase of 2.3%. However, inventories continue to be historically constrained in relation to consumption levels.
Chinese stockpiles have decreased to their lowest levels in almost a decade, subsequent to unprecedented exports exceeding 660 tonnes in October, underscoring regional shortages and liquidity pressures beyond the US and UK. Outlook projections remain positive, with Commerzbank setting a target of $95 per ounce by the end of 2026, while HSBC anticipates elevated yet volatile prices due to robust institutional investment demand, notwithstanding a decline in industrial usage.
From a technical perspective, the market is experiencing long liquidation, evidenced by a 1.91% decrease in open interest as prices declined by Rs 5,180. Silver exhibits support at Rs 3,10,500; a decline beneath this level may lead to a test of Rs 3,02,500. Conversely, resistance is identified at Rs 3,31,010, with a breach above this threshold potentially facilitating further gains toward Rs 3,43,520.