Silver prices fell by 2.43%, closing at Rs. 182,576, influenced by a robust US dollar index that rose to 102 following stronger-than-anticipated inflation data, which bolstered expectations for additional interest rate hikes by the Federal Reserve. In October, US consumer prices experienced a 0.4% increase, surpassing the anticipated 0.3%. Meanwhile, core CPI rose by 0.3% for the third consecutive month, exceeding the forecast of 0.2%. Additionally, October employment data revealed robust job growth alongside a decrease in unemployment to 4.1%, reinforcing expectations for another rate hike at the Federal Reserve meeting scheduled for December 8-9. Speculative positioning exhibited a decline, as net long positions fell by 238 contracts to a total of 2,665 in the week concluding on November 3.
In October, Perth Mint silver sales experienced a decline of 36% month-on-month, falling to 388,536 ounces from 605,408 ounces in September. This decrease indicates a reduction in investment interest, likely influenced by rising expectations regarding interest rates. Despite concerns regarding near-term demand, the global silver market is projected to experience its sixth consecutive annual deficit in 2026, with the shortfall anticipated to expand to 46.3 million ounces, up from 40.3 million ounces in 2025. Around 762 million ounces have been drawn from global inventories since 2021, underscoring ongoing structural supply constraints.
However, total silver demand is projected to decrease by 2% in 2026, as industrial fabrication is anticipated to drop by 3% to a four-year low due to weaker economic conditions and geopolitical uncertainties. In contrast, demand for coins and bars may rise by 18% driven by improving investment demand in the US. Global silver supply is projected to decline by 2%, which offers some underlying support to the market. London vault holdings reached 28,985 tonnes at the conclusion of September, reflecting a month-on-month increase of 1.95%, which suggests enhanced physical availability.
Silver is currently experiencing renewed selling pressure, as evidenced by a slight increase in open interest of 0.06% to 17,021 contracts, alongside a price decline of Rs. 4,551, suggesting the establishment of further short positions. Support is positioned at Rs. 181,120, with an additional level at Rs. 179,650. Conversely, resistance is identified at Rs. 185,180, beyond which prices may approach Rs. 187,780.
