Silver settled sharply higher by 4.47% at Rs. 187,735, bolstered by a weaker dollar as early US midterm election results indicated gains for Democrats in both chambers of Congress, raising expectations of political gridlock and potentially limiting further fiscal expansion. Easing amid hopes of continued US-Iran diplomatic efforts contributed to a reduction in inflation concerns, although geopolitical tensions persisted as both nations remained distant from achieving an agreement.
Investors are currently concentrating on the upcoming US non-farm payrolls report scheduled for Friday, seeking insights into the Federal Reserve’s policy direction. Concurrently, markets are assigning a 78% likelihood to a rate increase in December, a development that may limit additional advances in non-yielding precious metals. On the supply-demand front, the Silver Institute and Metals Focus have projected that the global silver market will experience its sixth consecutive annual deficit in 2026, with the shortfall expected to widen to 46.3 million ounces from 40.3 million ounces in 2025. Around 762 million ounces have been drawn from global stocks since 2021, underscoring a persistent structural supply tightness despite an enhancement in market liquidity.
Total silver demand is projected to decrease by 2% in 2026, driven by a downturn in both industrial and jewellery consumption. Additionally, industrial fabrication is anticipated to decline by 3%, reaching a four-year low. However, demand for coins and bars is anticipated to rise by 18%, bolstered by a resurgence of investment interest in the United States. Global silver supply is projected to decrease by 2%, further solidifying the existing deficit. Meanwhile, silver holdings in London vaults rose by 1.95% month-on-month, reaching 28,985 tonnes at the end of September 2026, with a valuation of $56.6 billion.
Technically, the market is experiencing new buying activity, as evidenced by a 1.86% increase in open interest to 17,143 contracts, coupled with a price rise of Rs. 8,037, suggesting the establishment of new bullish positions. Silver is currently finding support at Rs. 180,890; a decline below this level could see prices testing Rs. 174,050. Conversely, resistance is established at Rs. 191,290. A sustained move above this level could extend the upside toward Rs. 194,850.
