Silver bounces from 11-month low as softening oil prices ease inflation concerns
Silver rose 0.47% to Rs 196,717, providing some relief as fall in crude oil prices and easing of inflation concerns. The rally was kept under control by a stronger US dollar, which hit 102.2 for the third consecutive day, and by still-high Treasury yields.
Traders are betting that the Federal Reserve will keep rates steady, but they are looking for any sign that a hike in December could still be on the way.
US durable goods orders rose 1.8% month-on-month in September, above estimates of 1.5%. Also, building permits fell 0.4% to an annual 1.398 million.
Analysts cut their silver price targets given the prolonged tight monetary stance. They now see an average price of $66.75 an ounce in 2027, down from $70.30 projected for 2026.
Despite the recent decline, the silver market remains stable. The global deficit is expected to increase from 40.3 million ounces in 2025 to 46.3 million ounces in 2026 – a deficit for six consecutive years. Weak purchasing from industrials and jewelry should lead to a 2% decline in overall demand, while demand for coins and bars could increase by 18%.
Industrial use of silver is set to fall 3% to a four-year low, reflecting concerns about the world economy. Supply is also projected to decline by 2%, maintaining supply risks, with approximately 762 million ounces removed from inventories through 2021.
Silver has fallen about 35% since its January high of $121.60 an ounce. Improved liquidity in the London market has eased the immediate pressure to some extent.
On the technical side, short covering is in play. Open interest slipped 0.86% to 16,539 contracts, while prices rose Rs 924. The metal found support around Rs 193,030, then Rs 189,340. Resistance sits near Rs 198,900. A clear break above Rs 198,900 could take the prices to Rs 201,080, while a fall below Rs 193,030 could take them down to Rs 189,340.
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Key Tips for Silver Traders
- Silver gained modestly as oil fell and inflation concerns eased, but upside was limited by a stronger dollar and higher yields.
- Supply remains tight with losses expected to widen through 2026, supporting bullish prospects.
- Industrial demand is declining, but purchases of coins and bars may get a boost.
- Technical levels to watch: Support at Rs.193,030 and Rs.189,340; Resistance at Rs 198,900 and next target near Rs 201,080.