Silver concluded the trading session with a gain of 1.11%, reaching Rs. 210,660, as the dollar pulled back from an 18-month peak amid ambiguous indications from Federal Reserve officials concerning potential future interest rate hikes. San Francisco Fed President Mary Daly suggested that further rate hikes could be required to manage inflation, yet she did not advocate for immediate measures during the October 27-28 meeting. Meanwhile, Michelle Bowman expressed support for a cautious approach, emphasising the importance of evaluating economic developments before making decisions.
In September 2026, US retail sales experienced a month-on-month increase of 0.8%, surpassing the anticipated growth of 0.3%. Concurrently, producer prices escalated by 1.3%, representing the most significant rise since March 2022. Core producer prices rose by 0.7%, while the New York Fed’s Empire State Manufacturing Index advanced to 25.5 from 7.6, suggesting an uptick in economic activity alongside ongoing inflationary pressures. At the conclusion of September, London vaults contained 28,985 tonnes of silver, reflecting a month-on-month increase of 1.95%, with a total valuation of $56.6 billion. The global silver market is anticipated to experience its sixth consecutive annual deficit in 2026, with the shortfall expected to increase to 46.3 million ounces, up from 40.3 million ounces in 2025.
Approximately 762 million ounces have been drawn from stocks since 2021, underscoring persistent supply constraints even as market liquidity shows signs of improvement. Total demand is projected to decrease by 2%, whereas industrial fabrication may experience a decline of 3%, reaching a four-year low due to diminished consumption in the industrial and jewellery sectors. Conversely, demand for coins and bars is projected to rise by 18%, bolstered by a resurgence in investment demand within the United States. Global silver supply is anticipated to decline by 2%, underscoring apprehensions regarding structural shortages.
Silver prices have experienced a decline of 35% from their peak of $121.6 per ounce reached in January, subsequent to the remarkable 147% surge observed in 2025. Silver is currently experiencing short covering, as evidenced by a 1.3% decline in open interest to 20,420 contracts, alongside a price increase of Rs. 2,322. Immediate support is positioned at Rs. 208,780, beneath which prices may encounter a test at Rs. 206,900. Resistance is observed at Rs. 212,020, and a sustained movement above this threshold may propel prices toward Rs. 213,380.
