Silver concluded the trading session with a gain of 1.46%, reaching Rs 2,38,205. This increase was bolstered by short covering as investors reevaluated their positions in the wake of the US Federal Reserve’s initial rate hike in three years. The dollar retreated from a seven-week high following the decision by US policymakers to raise rates and indicate the possibility of further hikes. This development typically exerts downward pressure on precious metals, as higher interest rates enhance the appeal of interest-bearing assets.
The Bank of England maintained its current interest rates, whereas the Bank of Japan is anticipated to increase rates to a level not seen in 31 years. Meanwhile, alleviating worries regarding oil supply interruptions and optimism surrounding advancements toward resolving the Iran conflict diminished certain safe-haven demand. US weekly unemployment claims decreased by 10,000 to 196,000, the lowest level since July’s 189,000. Meanwhile, housing starts fell by 2.6% month-on-month to 1.275 million units in August, representing the second consecutive decline and the lowest figure since October 2025. Building permits declined by 2.7% to 1.394 million, falling short of market expectations of 1.41 million, indicative of the pressures stemming from elevated mortgage rates and affordability challenges.
London vault holdings rose by 0.5% month-on-month, reaching 28,213 tonnes at the end of July, with a valuation of $52.7 billion. The global silver market is anticipated to continue experiencing a structural deficit for the sixth consecutive year, with projections indicating that the deficit will expand to 46.3 million ounces in 2026, up from 40.3 million ounces in 2025. Total demand is projected to decrease by 2%, with industrial fabrication anticipated to drop by 3%, reaching a four-year low. This decline is expected to be partially counterbalanced by a forecasted 18% increase in demand for coins and bars.
Global supply is anticipated to decrease by 2%, with 762 million ounces reportedly withdrawn from stocks since 2021, underscoring ongoing tightness. Technically, silver continues to experience short covering, as evidenced by a 1.58% decline in open interest to 12,309, while prices increased by Rs 3,419. Silver has support at Rs 2,32,520, and a break below this level could expose Rs 2,26,830. Resistance is positioned at Rs 2,41,600, and a sustained movement above this level may pave the way toward Rs 2,44,990.
