Silver settled 1.04% lower at Rs. 221,233 as investors assessed the latest Federal Reserve meeting minutes, which reinforced expectations of further monetary tightening amid persistent inflation concerns. All 19 policymakers supported the September rate increase, while most indicated that another hike could be appropriate before year-end. However, soft employment and inflation data reduced the probability of an October 28 rate hike to 18.3%, with markets increasingly expecting rates to remain unchanged.
Elevated crude oil prices and escalating geopolitical tensions surrounding Iran, including risks to shipping through the Strait of Hormuz, continued to influence inflation expectations and precious metal sentiment. Delegates at the London Bullion Market Association’s annual conference forecast silver prices reaching $97 per ounce over the next 12 months. Perth Mint’s silver sales surged 81.3% month on month to 605,408 ounces in September, their highest level since March, and increased 4.6% year on year. Silver holdings in London vaults rose 0.5% month on month to 28,213 tonnes at the end of July 2026, valued at $52.7 billion.
Structurally, the silver market is heading toward its sixth consecutive annual deficit, with the 2026 shortfall projected to widen to 46.3 million ounces from 40.3 million ounces in 2025. Despite this supply imbalance, total demand is expected to decline 2%, while industrial fabrication could fall 3% to a four-year low amid weaker economic growth. Conversely, investment demand for coins and bars is forecast to increase 18%. Silver prices have retreated approximately 35% from their January record high of $121.60 per ounce, easing liquidity pressures as metal returned from United States inventories and exchange traded products experienced outflows.
Technically, the market is witnessing fresh selling pressure, with prices declining Rs. 2,328 while open interest increased 3.46% to 18,363 contracts, indicating additional bearish positioning. Silver is finding support at Rs. 219,140, followed by Rs. 217,045. Resistance is placed at Rs. 223,990, and a sustained move above this level could trigger recovery toward Rs. 226,745.
