Silver prices settled 1.43% higher at Rs 2,41,603, supported by falling oil prices, which eased inflation concerns and helped push bond yields lower. Oil prices declined for a third consecutive session as Saudi Arabia worked to restore flows through its East-West pipeline, while the US 10-year Treasury yield eased to around 4.93% after briefly exceeding 5%. Markets continued assessing Federal Reserve policy following its first rate hike in three years, with expectations of another move in October currently around 53%. US unemployment claims fell by 10,000 to 196,000 in the second week of September, while housing starts declined 2.6% month-on-month to 1.275 million units in August, the lowest since October 2025.
Building permits also fell 2.7% to 1.394 million, reflecting pressure from higher mortgage rates and affordability constraints. London silver vault holdings increased 0.5% month-on-month to 28,213 tonnes at end-July, valued at $52.7 billion and equivalent to approximately 940,423 silver bars. The global silver market is heading toward a sixth consecutive structural deficit, with 762 million ounces drawn from stocks since 2021, increasing the risk of renewed liquidity tightness. The 2026 deficit is projected to widen to 46.3 million ounces from 40.3 million ounces in 2025, despite total demand declining 2%. Industrial fabrication is expected to fall 3% to a four-year low, while coin and bar demand could rise 18%, supported by stronger US buying.
Global supply is forecast to decline 2% as producer hedging normalises. Technically, silver is witnessing short covering, with open interest declining 4.98% to 11,725 contracts while prices gained Rs 3,398, indicating position unwinding alongside the price rise. Silver is currently finding support near Rs 2,38,835, and a break below this level could lead to a test of Rs 2,36,070. On the upside, resistance is placed near Rs 2,43,705, while a sustained move above this level could push prices toward Rs 2,45,810.
