Silver prices experienced a notable decline of 1.84%, closing at Rs 239,638. This drop can be attributed to the upward movement in US Treasury yields and robust economic data, which have heightened concerns regarding the trajectory of the Federal Reserve’s interest rates. The 10-year US Treasury yield increased to 4.65%, while the July PCE price index experienced a month-on-month rise of 0.2%, surpassing expectations of 0.1%. Annual inflation was recorded at 3.7%, compared to forecasts of 3.6%. Core PCE rose by 0.2% on a month-on-month basis and 3.3% year-on-year, aligning with forecasts. Consumer spending and income surpassed forecasts, with US GDP expanding by 1.5% in Q2 and durable goods orders increasing by 1.1% in July, outpacing expectations of 0.5%.
These figures bolstered the argument for a prudent approach by the Federal Reserve, exerting pressure on precious metals. In June, Chinese imports of silver-bearing ores surged by 62.5% year-on-year, reaching 219,000 tonnes. This increase reflects robust demand for raw materials, even amidst apprehensions regarding industrial consumption. Citi maintained a bullish outlook, forecasting silver at $75 per ounce over the next three months and potentially $90 over six to 12 months, supported by stronger investment demand and expectations of a less hawkish Federal Reserve. At the close of June 2026, London vaults contained 28,082 tonnes of silver, reflecting a month-on-month increase of 1.7%.
This stockpile is valued at $53.1 billion and corresponds to roughly 936,052 bars. The global silver market is anticipated to experience its sixth consecutive structural deficit, with 762 million troy ounces having been withdrawn from stocks since 2021. The 2026 deficit is anticipated to expand to 46.3 million ounces, up from 40.3 million in 2025, even as total demand experiences a 2% decrease. Industrial fabrication is projected to decline by 3%, whereas demand for coins and bars is anticipated to increase by 18%, partially mitigating the impact of reduced consumption in the industrial and jewellery sectors. Total supply is anticipated to decrease by 2%.
Technically, silver is experiencing long liquidation, as evidenced by a decline in open interest of 11.79% to 7,336, alongside a price decrease of Rs 4,489. Immediate support is positioned at Rs 236,730, and a breach below this threshold could reveal Rs 233,830. On the upside, resistance is positioned at Rs 244,355, and a sustained movement above this threshold could propel prices toward Rs 249,080.
