Silver prices concluded the trading session at Rs 232,690, reflecting a decline of 0.97%. This downturn was influenced by rising oil prices and increasing anticipations of a more stringent monetary policy from the Federal Reserve. Oil prices surged toward four-month highs as Saudi Arabia closed a crucial pipeline that circumvented the Strait of Hormuz in response to drone attacks, further exacerbating inflationary pressures stemming from the ongoing Middle East crisis. Markets are currently reflecting an approximately 87% likelihood of a 25-basis-point increase in the Federal Reserve’s interest rate this Wednesday. U.S. consumer inflation held steady at 3.4% in August, with the monthly CPI registering a 0.4% increase, marking its most significant rise in three months.
Producer prices experienced an uptick, driven by increased wholesale energy costs that contributed to inflationary pressures. Concurrently, employment data persisted in demonstrating resilience within the labour market. For the week ended September 8, COMEX silver speculators increased net long positions by 2,006 contracts to 14,176, indicating a relatively stronger bullish positioning despite the recent price weakness.London vault holdings reached 28,213 tonnes at the conclusion of July 2026, reflecting a month-on-month increase of 0.5% and valued at $52.7 billion, which is roughly equivalent to 940,423 silver bars.
The global silver market is projected to continue experiencing a structural deficit for the sixth consecutive year, having seen 762 million troy ounces withdrawn from stocks since 2021, thereby sustaining the risk of renewed liquidity constraints. 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%, reaching a four-year low, whereas demand for coins and bars may increase by 18%, bolstered by robust purchasing activity in the U.S. Global supply is projected to decrease by 2% as producer hedging returns to normal levels.
Technically, the silver market is experiencing renewed selling pressure, as evidenced by a 2.13% increase in open interest to 13,559, alongside a price decline of Rs 2,284. This suggests the entry of new short positions into the market. Silver is presently encountering support around Rs 230,475, and a persistent breach beneath this threshold may prolong the downturn toward Rs 228,255. On the upside, resistance is positioned near Rs 234,190, while a decisive move above this level could initiate a recovery toward Rs 235,685.
