Silver settled 2.04% higher at Rs. 225,755, gaining Rs. 4,522, supported by declining oil prices and stabilising bond yields, which alleviated immediate concerns regarding inflation and the tightening of monetary policy. The US 10-year Treasury yield declined to 5.22% following strong demand at a 30-year debt auction. Geopolitical concerns also moderated following US President Donald Trump’s indication that Washington would refrain from attacking Iran prior to next month’s midterm elections, while diplomatic efforts persisted. However, Federal Reserve officials upheld a hawkish position, suggesting that additional rate hikes could be required to manage inflation.
According to CME FedWatch data, the probability of an October rate hike has decreased to 18.3%, with markets showing a growing preference for a pause, although the prospect of tightening in December remains on the table. Meanwhile, delegates at the London Bullion Market Association’s annual gathering project silver prices to attain $97 per ounce within the forthcoming 12 months. Perth Mint silver sales experienced a remarkable increase of 81.3% month on month, reaching 605,408 ounces in September, marking their highest level since March.
London vault holdings reached 28,213 tonnes at the end of July 2026, reflecting a month-on-month increase of 0.5% and carrying a valuation of $52.7 billion. Fundamentally, the silver market is anticipated to experience its sixth consecutive annual deficit, with the shortfall expected to expand to 46.3 million ounces in 2026, up from 40.3 million ounces in 2025. However, total demand is projected to decrease by 2%, while industrial fabrication may experience a decline of 3%, reaching a four-year low due to subdued economic growth expectations. In contrast, demand for coins and bars is projected to rise by 18%, which will partially mitigate the weakness observed in industrial sectors.
Global supply is anticipated to decrease by 2%, which will offer fundamental support for prices. Silver is currently experiencing short covering, evidenced by a decline in open interest of 8.92% to 16,859 contracts, coinciding with an increase in prices. Immediate support is positioned at Rs. 224,070, succeeded by Rs. 222,385, whereas resistance is established at Rs. 227,010 and Rs. 228,265. A sustained move above Rs. 227,010 could extend the recovery toward Rs. 228,265, whereas a break below Rs. 224,070 may trigger further weakness toward Rs. 222,385.
