Silver settled higher by 0.47% at Rs 196,717, buoyed by diminishing inflation worries as prices fell in anticipation of the US Federal Reserve’s policy meeting. However, gains remained constrained by a stronger currency, which rose to 102.2 for a third consecutive session, alongside elevated Treasury yields. Markets anticipate that the Fed will maintain current interest rates, while investors are poised to scrutinise its guidance regarding the potential for a rate increase in December. In September, US durable goods orders rose by 1.8% month-on-month, surpassing the anticipated increase of 1.5%. Conversely, building permits experienced a decline of 0.4%, reaching an annualised rate of 1.398 million.
Analysts have revised their silver price outlook downward in light of anticipated extended restrictive monetary policy, projecting an average price of $66.75 per ounce for 2027, a decrease from the $70.30 forecast for 2026. Despite recent weakness, the silver market continues to exhibit structural tightness, with projections indicating that the global deficit is set to expand to 46.3 million ounces in 2026, up from 40.3 million ounces in 2025. This development signifies a sixth consecutive year of deficit. Total demand is projected to decrease by 2% as a result of diminished industrial and jewellery consumption, whereas demand for coins and bars is anticipated to rise by 18%.
Industrial silver fabrication is anticipated to decline by 3%, reaching a four-year low, as apprehensions regarding global economic growth persist. Global silver supply is projected to decrease by 2%, with around 762 million ounces having been extracted from inventories since 2021, underscoring ongoing supply vulnerabilities. Silver prices have declined approximately 35% from their January peak of $121.60 per ounce, though enhanced liquidity in the London market has alleviated short-term supply constraints.
Technically, the market is experiencing short covering, as open interest has decreased by 0.86% to 16,539 contracts, accompanied by a price increase of Rs 924. Silver exhibits support levels at Rs 193,030 and Rs 189,340, with resistance identified at Rs 198,900. A sustained move above Rs 198,900 could propel prices toward Rs 201,080, while a breach below Rs 193,030 may initiate further declines toward Rs 189,340.
