Silver settled 1.38% higher at Rs.246,597, buoyed by a weaker dollar and unexpected liquidity support measures from the US Treasury. Treasury Secretary Scott Bessent suggested that government Treasury buybacks might be increased further. In July 2026, US retail sales experienced a decline of 0.6% month-over-month, significantly falling short of the anticipated 0.1% increase and reversing the 0.2% rise observed in June. Concurrently, initial jobless claims rose by 9,000, reaching a total of 209,000, which surpassed market expectations of 202,000. The softer US economic data reinforced expectations of a less hawkish Federal Reserve, providing additional support to precious metals.
Citi has upheld a positive forecast for silver, aiming for a price of $75 per ounce within the next three months and $90 per ounce over a six to twelve-month horizon, attributing this outlook to increased investor demand and a potentially advantageous monetary-policy landscape. Chinese imports of silver-bearing ores increased by 62.5% year-on-year to 219,000 tonnes in June, underscoring persistent engagement within the silver supply chain. At the conclusion of June, London silver vault holdings experienced a month-over-month increase of 1.7%, reaching a total of 28,082 tonnes, which is valued at $53.1 billion.
The global silver market is anticipated to sustain a structural deficit for the sixth consecutive year, with the deficit for 2026 projected to expand to 46.3 million ounces, up from 40.3 million ounces in 2025. Total demand is projected to decrease by 2%, primarily attributed to reduced consumption in the industrial and jewellery sectors, whereas demand for coins and bars is anticipated to increase by 18%. Industrial silver fabrication is anticipated to decrease by 3%, reaching a four-year low, whereas total supply is expected to contract by 2%. Despite enhanced liquidity following the prior squeeze, 762 million ounces have reportedly been withdrawn from stocks since 2021, sustaining ongoing supply concerns in the longer term.
Silver is currently experiencing short covering, evidenced by a 6.2% decrease in open interest to 9,373, alongside a price increase of Rs.3,354. The market is currently establishing a support level at Rs.244,525. A breach of this threshold may initiate a downward movement toward Rs.242,450. On the upside, resistance is positioned at Rs.248,400, and a sustained movement above this threshold could propel prices toward Rs.250,200. Overall, the near-term outlook appears favourable as prices maintain their position above critical support levels.
