Silver prices concluded the trading session with a decline of 1.66%, settling at Rs 235,895. This downturn was primarily influenced by the hawkish signals emanating from Federal Reserve officials, which overshadowed the supportive effects that declining oil prices typically have on inflation and interest-rate expectations. Richmond Fed President Tom Barkin cautioned that inflationary shocks may require time to dissipate, while Boston Fed President Susan Collins supported last week’s rate increase due to worries that inflation could persist above the 2% target. Chicago Fed President Austan Goolsbee emphasised the significance of strong demand, energy costs, tariffs, and supply shocks as inflationary risks.
Meanwhile, Minneapolis Fed President Neel Kashkari noted that elevated inflation continues to be a primary concern. The CME FedWatch Tool suggests a nearly 90% likelihood of at least one additional Fed rate hike this year, which continues to exert pressure on non-yielding precious metals. Meanwhile, oil prices continued their downward trend for a sixth consecutive session following reports of productive discussions between the US and Iran. Tehran has suggested it might consider reopening the Strait of Hormuz if military pressure and the blockade of Iranian ports are alleviated. Declining energy prices may alleviate inflationary pressures and temper anticipations for stringent monetary policy adjustments.
London silver vault holdings reached 28,213 tonnes at the end of July, reflecting a month-on-month increase of 0.5% and a valuation of $52.7 billion. The global silver market is projected to continue experiencing a structural deficit for the sixth consecutive year, with the shortfall anticipated to expand to 46.3 million ounces in 2026, up from 40.3 million ounces in 2025, even as total demand is expected to decrease by 2%. Industrial silver fabrication is projected to decline by 3%, reaching a four-year low, whereas demand for coins and bars is anticipated to increase by 18%. Global supply is anticipated to decrease by 2%.
Silver has declined 35% from its January peak of $121.6 per ounce, attributed to diminished physical demand and enhanced liquidity. Technically, the market continues to experience new selling pressure, as open interest has increased by 8.77% to 14,257, while prices have decreased by Rs 3,993. Silver is currently supported at Rs 233,805, and a decline below this threshold may reveal Rs 231,715. Resistance is positioned at Rs 239,680, and a sustained movement above this threshold may initiate a recovery toward Rs 243,465.
