Silver concluded the trading session with a modest increase of 0.04%, reaching Rs. 195,793, reflecting a gain of Rs. 74. This movement comes as investors remain attentive to developments in the Middle East while anticipating the upcoming Federal Reserve policy meeting scheduled for October 27-28. Easing oil prices have alleviated inflation concerns, while renewed diplomatic initiatives by Qatar aimed at de-escalating regional tensions have fostered a sense of cautious optimism. The Fed is widely expected to maintain current rates, although markets are anticipating a potential quarter-point increase in December.
Upcoming monetary policy decisions from the European Central Bank, Bank of Canada, and Bank of Japan, in conjunction with US GDP and PCE inflation data, are poised to shape market sentiment. India has granted permits for the importation of around 6,500 tonnes of silver over the upcoming six months to satisfy festive-season demand, subsequent to previous import restrictions. However, domestic premiums have decreased to 45 cents per ounce from $2.50 observed last week. At the conclusion of September, London’s silver vault holdings experienced a month-on-month increase of 1.95%, reaching a total of 28,985 tonnes, with a valuation of $56.6 billion.
Fundamentally, the global silver market is anticipated to experience its sixth consecutive annual deficit in 2026, with the shortfall expected to expand to 46.3 million ounces, up from 40.3 million ounces in 2025. Total demand is projected to decrease by 2%, with industrial silver fabrication anticipated to drop by 3%, reaching a four-year low due to subdued economic growth and reduced industrial consumption. In contrast, demand for coins and bars is anticipated to increase by 18%, bolstered by a resurgence in investment demand within the United States. Global silver supply is projected to decrease by 2%, with around 762 million ounces having been extracted from inventories since 2021.
This underscores a continuing structural tightness in the market, even as liquidity conditions have improved. Silver is currently experiencing short covering, evidenced by a 1.15% decrease in open interest to 16,683 contracts, alongside a price increase of Rs. 74. The metal is currently encountering support at Rs. 193,140, with an additional support level at Rs. 190,490. Resistance is established at Rs. 197,820. A sustained move above this resistance could push prices toward Rs. 199,840, whereas a break below Rs. 193,140 may extend the downside toward Rs. 190,490.
