Silver prices experienced a significant increase, closing up by 4.16% at Rs 2,46,155, propelled by its classification as an essential US mineral, constricted supply conditions, diminished global stockpiles, and robust industrial and investment demand. Sentiment was further buoyed by expectations that the US Federal Reserve could deliver two additional rate cuts in 2026, particularly as markets anticipate a potential shift toward a more dovish stance with the expected nomination of a new Fed chair later this year.
Increased geopolitical tensions, characterized by the resurgence of Russia–Ukraine conflicts and ongoing US–Venezuela discord, have further bolstered the demand for safe-haven assets such as precious metals. The global silver market is experiencing increasing pressure on the supply side, as Chinese inventories have reached their lowest point in a decade.
Stocks in Shanghai Futures Exchange warehouses have decreased to levels not observed since 2015, while volumes on the Shanghai Gold Exchange have fallen to a nine-year low, subsequent to record Chinese exports exceeding 660 tonnes in October. Despite the LBMA indicating a 3.5% month-on-month increase in silver holdings in London vaults to 27,187 tonnes, liquidity outside China continues to be constrained, accompanied by high borrowing costs in London.
From a technical perspective, the market is experiencing short covering, evidenced by a significant decline in open interest of 11.22% to 12,352, alongside a price increase of Rs 9,839. Silver exhibits support at Rs 2,40,960, with a potential decline below this level possibly testing Rs 2,35,770. On the upside, resistance is observed at Rs 2,50,620, and a movement above this threshold may pave the way toward Rs 2,55,090.