Silver settled marginally lower by 0.04% at Rs 244,127 as the dollar index steadied near 99 on safe-haven demand following fresh U.S. sanctions targeting Iran. However, the greenback remained near three-month lows as the U.S. Treasury expanded its buyback program for long-dated government debt, raising concerns regarding debt sustainability and potentially constraining dollar strength. Market participants are closely monitoring the U.S. PCE inflation data and Federal Reserve Chair Kevin Warsh’s speech at Jackson Hole for indications regarding the forthcoming trajectory of monetary policy.
Fundamentally, silver continues to benefit from constrained physical availability, as the market approaches a sixth consecutive year of structural deficit. Stocks have decreased by 762 million ounces since 2021, heightening the risk of renewed liquidity constraints. The global silver deficit is anticipated to expand to 46.3 million ounces in 2026, up from 40.3 million ounces in 2025, even as total demand is forecasted to decrease by 2%. Industrial fabrication is anticipated to decline by 3%, reaching a four-year low, due to subdued expectations for economic growth. In contrast, demand for coins and bars is expected to increase by 18%, bolstered by robust investment demand in the United States.
Global silver supply is projected to decrease by 2% as producer hedging returns to normal levels. Chinese imports of silver-bearing ores increased by 62.5% year-on-year to reach 219,000 tonnes in June, underscoring persistent industrial activity. London vault holdings rose by 1.7% month-on-month, reaching 28,082 tonnes at the end of June, with a valuation of $53.1 billion. Citi maintained a bullish outlook, targeting $75 per ounce over three months and $90 over six to 12 months, supported by stronger investment demand and expectations of a less hawkish Federal Reserve.
Technically, silver is experiencing prolonged liquidation, as evidenced by a 10.17% decrease in open interest to 8,201, alongside a price drop of Rs 93. Immediate support is positioned at Rs 241,645, succeeded by Rs 239,170, whereas resistance is identified at Rs 245,655 and Rs 247,190. A break below Rs 241,645 could extend the corrective phase, while sustained movement above Rs 245,655 may revive bullish momentum toward Rs 247,190.
