Silver concluded the trading session with a 2.59% increase, reaching Rs. 1,83,779 per kg. This uptick was bolstered by a weaker market sentiment and declining prices, influenced by diplomatic talks between Iranian and Qatari officials focused on resolving the ongoing US-Israeli conflict concerning Iran. However, gains remained limited as markets continued to factor in a 75% likelihood of a 25-basis-point Federal Reserve rate increase in December, following last week’s decision to maintain interest rates at their current level.
HSBC anticipates a significant contraction in the silver market deficit, projecting a decrease from 140 million ounces in 2025 to 5 million ounces in 2026, followed by a slight expansion to 12 million ounces in 2027. This outlook is attributed to increasing mine supply, enhanced scrap recovery and recycling efforts, coupled with a decline in industrial and jewellery demand. The bank projected silver at $70 per ounce by the end of 2026 and $65 in 2027. Meanwhile, the Silver Institute and Metals Focus anticipate that the market will experience its sixth consecutive annual structural deficit, with total stock withdrawals amounting to 762 million ounces since 2021.
The global silver deficit is anticipated to expand to 46.3 million ounces in 2026, up from 40.3 million ounces in 2025, even with a 2% decrease in overall demand. This is attributed to a projected 3% decline in industrial fabrication, reaching a four-year low, while demand for coins and bars is expected to rise by 18%. London’s silver vault holdings experienced a month-on-month increase of 1.95%, reaching a total of 28,985 tonnes by the end of September, with a valuation of $56.6 billion. Meanwhile, analysts anticipate that silver will average $66.75 per ounce in 2027, indicating a recovery from current levels while still falling short of the 2026 forecast of $70.30.
Technically, the market is experiencing short covering, evidenced by a 6.47% decline in open interest to 16,933 contracts, alongside a price increase of Rs. 4,647. Silver is presently encountering support at Rs. 1,81,100, with additional support at Rs. 1,78,420, while resistance is established at Rs. 1,85,570. A sustained move above this resistance could extend the recovery toward Rs. 1,87,360, whereas a break below immediate support may revive selling pressure.
