Silver prices continued their upward trajectory, closing 0.19% higher at Rs 236,316. This increase is underpinned by its classification as a critical mineral in the US, a structurally constrained supply, low inventory levels, and an uptick in both industrial and investment demand. Anticipations of a more accommodative monetary stance further supported market sentiment, as participants factored in two further reductions in US interest rates by 2026.
The ambiguity surrounding the possible appointment of a successor to Jerome Powell as Federal Reserve chair, whose term concludes in May, has heightened anticipations of a more accommodative policy orientation. Geopolitical tensions, such as the resurgence of hostilities between Russia and Ukraine and ongoing frictions between the US and Venezuela, have further solidified silver’s status as a safe haven.
On the supply side, the global silver market encounters new challenges as Chinese stockpiles have declined to their lowest levels in a decade. Inventories associated with the Shanghai Futures Exchange have reached their lowest levels since 2015, coinciding with unprecedented Chinese exports surpassing 660 tonnes in October, primarily directed to London to alleviate a market squeeze. Notwithstanding this, liquidity conditions in London continue to be constrained, accompanied by high borrowing costs. Data from the LBMA indicated that silver holdings in London vaults experienced a month-on-month increase of 3.5% in November, highlighting recent inflows while still indicating historically tight conditions.
From a technical perspective, the market is experiencing renewed buying activity, as evidenced by a notable increase in open interest of 4.3% to 13,738, accompanied by a price rise of Rs 443. Silver currently exhibits immediate support at Rs 232,540, with potential further downside risk extending toward Rs 228,770. On the upside, resistance is observed at Rs 242,540, and a sustained move above this level could pave the way toward Rs 248,770.