Silver took a huge dive today and closed at Rs 199,599 with a huge fall of 4.57%. A mix of aggressive profit-booking, traders cutting their bullish bets and a major swing in grassroots demand sent prices falling sharply.
According to Kedia advisory updates, the Government of India has approved import permits of around 6,500 MT of silver in the next six months. The goal is simple: to bring in enough metal to meet festival demand. The move comes just after India imposed strict restrictions on silver shipments in May and further tightened the rule book in June.
Because new supplies are on the way, the blind crowd on the ground is quickly quelled. Cash premium in India fell sharply to just $0.45 an ounce from $2.50 an ounce just a week ago. This decline shows that buyers are no longer worried about the shortage of physical metal in the spot market.
At the same time, global macro triggers are putting everyone at risk. Crude oil prices rose after the drone attack on Saudi Aramco's Shaybah oilfield. The growing tensions around Iran and fresh concerns about energy-driven inflation are forcing traders to reconsider what central banks will do next. While most expected the US Federal Reserve to keep interest rates steady at its October meeting, many now believe rates could be raised in December.
Big speculative players are clearly reducing their risk. On the COMEX, net long positions on silver declined by 1,874 contracts, bringing the total to 5,735 for the week ended October 13. The smart money decided to retreat from the long side.
Global silver deficit and vault reserves
In the UK, reserves in London vaults increased slightly. As of the end of September 2026, Vault holdings stood at 28,985 tonnes, up 1.95% month-on-month, with a total valuation of $56.6 billion.
Despite the decline in prices this week, silver balance sheets remain tight around the world. Analysts project 2026 will be the sixth consecutive year that demand outstrips supply. Global deficit is expected to increase from 40.3 million ounces to 46.3 million ounces in 2025. Data from the Silver Institute and Metals Focus shows that total inventories have declined by 762 million ounces since 2021.
Looking at overall global demand, the number is expected to be down by about 2%. Industrial fabrication could fall 3% to a four-year low as factory output and jewelery production slow. Still, retail buyers are on the move: Demand for physical coins and bars is expected to grow 18%, helping to offset industrial weakness. Meanwhile, total world mine production is expected to decline by 2%, meaning the structural supply shortage is far from over.
Silver technical levels and chart structure
From a chart perspective, silver is in a clear long downtrend. Open interest fell 4.27% to 19,038 contracts, while prices fell by Rs 9,569. This pattern shows that buyers are closing out old trades to capture profits rather than aggressive bears opening new short positions.
Traders should keep a close eye on key price ranges:
- First Support:Rs 196,940
- Second Support:Rs 194,290
- First resistance:Rs 204,130
- Second resistance:Rs 208,660
If prices dip below Rs 196,940, we may see selling towards Rs 194,290. On the other hand, if silver manages to move above Rs 204,130 and sustain there, the market sentiment will improve rapidly and doors will open for retesting Rs 208,660.
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Conclusion for silver traders and investors
- Short Term Trends:Indian material premiums have eased and import quotas will boost local supply, taking pressure off recent price increases.
- Key Price Trigger:Look for a floor of Rs 196,940. Breaking it opens up the possibility of more downside, while clearing the Rs 204,130 level lets the upside regain control.
- Long Term Picture:Six years of shortages and falling mine supply means long-term buyers may still find attractive entry points after the dust settles.