Silver settled marginally higher by 0.09% at Rs 226,087 as weaker-than-expected US employment data reduced pressure on the Federal Reserve to raise interest rates further. US payrolls increased by only 29,000 in September against expectations of 90,000, while August gains were revised down to 133,000. The unemployment rate rose to 4.2%, and annual wage growth slowed to 3.0%, its weakest pace since May 2021. Markets now see nearly an 80% probability of unchanged Fed policy this month, while December hike expectations remain around 69%.
However, elevated Treasury yields, with the 10-year yield near its highest level since 2002, continued to limit upside in precious metals. Fed officials including Michael Barr, Beth Hammack and John Williams maintained a cautious stance on inflation and indicated that further rate hikes could remain necessary. COMEX silver speculators reduced net long positions by 5,278 contracts to 7,738 for the week ending September 29.
London silver vault holdings rose 0.5% month-on-month to 28,213 tonnes at end-July, valued at $52.7 billion. Fundamentally, the silver market is heading toward a sixth consecutive structural deficit, with the 2026 deficit forecast to widen to 46.3 million ounces from 40.3 million in 2025 despite a 2% decline in total demand. Industrial fabrication is expected to fall 3%, while coin and bar demand could rise 18%. Global supply is forecast to decline 2%, supporting the longer-term market balance.
Technically, silver is under short covering as open interest declined 0.81% to 16,450 while prices gained Rs 210, indicating some fresh buying after recent weakness. The market is currently finding support at Rs 224,895, and a sustained break below this level could expose Rs 223,700. On the upside, resistance is placed at Rs 227,990, and a decisive move above this level could trigger further recovery toward Rs 229,890.
