Silver prices experienced a significant increase, closing up by 6.45% at Rs 3,56,279, propelled by robust safe-haven demand in the context of rising geopolitical and trade uncertainties. Market sentiment shifted significantly towards optimism following U.S. President Donald Trump’s warning of a potential increase in tariffs on South Korean goods from 15% to 25%, thereby reigniting global trade uncertainty. Investor confidence in sovereign bonds and currencies has been on a decline, leading to a shift of funds into precious metals as part of the ongoing “debasement trade,” driven by significant fiscal spending concerns in major economies.
Expectations regarding the U.S. Federal Reserve contributed to volatility, as speculation surrounding a potentially more dovish appointment to the Fed chair may enhance the outlook for a more accommodative monetary policy. Silver experienced additional gains due to a significant short squeeze, robust retail involvement, and increasingly constrained global supply conditions.
China’s silver inventories have fallen to their lowest levels in almost ten years, necessitating significant export shipments to London to alleviate supply pressures. Despite record inflows into London vaults—silver holdings increased by 2.3% month-on-month to 27,818 tonnes—liquidity concerns remain a significant issue. Major banks exhibit a positive outlook, as Commerzbank anticipates silver to reach $95 per ounce by the end of 2026, while HSBC has made significant upward revisions to its forecasts.
From a technical perspective, the market is experiencing new buying activity, as evidenced by a 3.65% increase in open interest to 10,323, coinciding with a significant price increase of Rs 21,580. Silver exhibits support at Rs 3,42,460; a breach beneath this level may lead to a test of Rs 3,28,645. Resistance is identified at Rs 3,67,455, and a breach of this threshold could lead to an upward movement towards Rs 3,78,635.