Silver prices concluded the trading session with a decline of 0.95%, settling at Rs 2,39,317. Market participants are closely observing the evolving situation in the Middle East and its possible implications for inflation and monetary policy. US President Donald Trump indicated he was in “deciding mode” regarding the Iran war, which has maintained an elevated geopolitical risk premium. Concurrently, expectations of additional tightening by the Federal Reserve have continued to exert pressure on precious metals. The Fed’s latest projections indicated one more rate increase this year, with markets pricing around a 53% probability of an October hike.
However, the easing of US bond yields from multi-year highs may constrain additional strength in the dollar and offer some support to silver. In the second week of September, initial jobless claims in the US decreased by 10,000, reaching a total of 196,000. Concurrently, housing starts experienced a month-on-month decline of 2.6%, totalling 1.275 million units in August, marking the lowest level since October 2025. Building permits decreased by 2.7% to 1.394 million units, reflecting ongoing challenges posed by high mortgage rates and issues related to affordability. Silver speculative net longs rose by 1,544 contracts to 12,632 for the week ending September 15, suggesting a resurgence in positioning despite the prevailing price weakness.
London 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 anticipated to persist in a structural deficit for the sixth consecutive year, with the deficit projected 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 fabrication is anticipated to decline by 3%, whereas demand for coins and bars may increase by 18%, bolstered by heightened investment demand in the United States. Total supply is projected to decrease by 2%.
Technically, the market is experiencing renewed selling pressure, as evidenced by a 7.56% increase in open interest to 12,684, alongside a price decline of Rs 2,286. Silver is currently finding support at Rs 2,38,185, and a sustained break below this level may result in a test of Rs 2,37,055. On the upside, resistance is positioned at Rs 2,41,310, and a decisive move above this threshold could pave the way toward Rs 2,43,305.
