Silver settled 2.22% lower at Rs. 179,698, as a rebound in oil prices following reports of a US strike on Iran’s Qeshm Island heightened concerns over renewed inflationary pressures and weighed on precious metals. Investors exhibited a cautious stance in anticipation of the US midterm elections, as renewed selling pressure in technology and artificial intelligence stocks prompted wider market liquidations. Meanwhile, markets closely monitored US-Iran negotiations, with Iranian officials indicating that further progress depended on Washington, while President Donald Trump suggested that Iran was eager to reach a settlement.
Fundamentally, the global silver market is poised for its sixth consecutive annual deficit, with a cumulative drawdown from inventories totalling 762 million ounces since 2021, thereby heightening the risk of renewed liquidity constraints. The Silver Institute and Metals Focus project the 2026 market deficit to reach 46.3 million ounces, an increase from the 40.3 million ounces noted in 2025, even with an anticipated 2% decrease in overall demand.
Industrial silver fabrication is projected to decline by 3%, reaching a four-year low, driven by reduced consumption in both industrial and jewellery sectors. This downturn is expected to be partially mitigated by a forecasted 18% rise in demand for coins and bars. Global silver supply is projected to experience a decline of 2% by 2026. At the conclusion of September 2026, silver holdings in London vaults reached 28,985 tonnes, reflecting a month-on-month increase of 1.95%, suggesting a modest enhancement in the availability of inventories.
Technically, the market is experiencing long unwinding, as open interest decreased by 0.61% to 16,830 contracts while prices dropped by Rs. 4,081, suggesting the liquidation of existing long positions. Silver is presently encountering support at Rs. 175,670, and a sustained breach beneath this threshold may initiate additional weakness toward Rs. 171,640. On the upside, resistance is positioned at Rs. 183,310, beyond which prices may rebound toward Rs. 186,910.
