Silver inches higher in cautious trade
Silver prices recently closed with marginal gains, up 0.04% at Rs. It has increased to Rs 195,793 per kg. 74. Traders preferred to remain cautious, keeping an eye on the tense situation in the Middle East and awaiting the upcoming policy meeting of the Federal Reserve on October 27-28.
The fall in crude oil prices provided some relief to the market by reducing immediate inflation fears. At the same time, fresh diplomatic talks led by Qatar helped calm geopolitical concerns a bit, bringing some quiet optimism back to the trading desk.
Keep an eye on Central Bank's steps and key global data
Most traders expect the US Federal Reserve to keep interest rates unchanged in this meeting. However, markets are still weighing the possibility of a 25 basis point rate hike in December. It is not just the Fed that is in the headlines. Upcoming policy announcements from the European Central Bank, Bank of Canada and Bank of Japan, as well as US GDP and PCE inflation data will give traders a clear direction on where global interest rates are headed.
Growth in India's festive imports and physical market trends
On the physical demand front, India has approved import licenses for around 6,500 tonnes of silver over the next six months. The move is aimed at ensuring adequate supply to the market for the busy festive season after earlier tightening of import restrictions. Even with this approval, local premiums fell sharply from $2.50 to about 45 cents an ounce over the past week.
In the UK, London-based vault holdings rose 1.95% month-on-month to 28,985 tonnes at the end of September. The estimated market value of that physical reserves is approximately $56.6 billion.
Long-term deficit and fundamental squeeze
Looking at the broader supply and demand picture, the global silver market is on track to post a supply deficit for the sixth consecutive year in 2026. Analysts predict the gap will widen from 40.3 million ounces to about 46.3 million ounces in 2025.
Total demand could decline by 2%, mainly because industrial silver production would decline by 3% to a four-year low due to slowing manufacturing activity globally. On the other hand, retail investment remains strong. Demand for silver bars and coins is expected to grow 18% in the United States as buyers return to physical bullion.
Meanwhile, worldwide mine production and scrap supply is projected to decline by 2%. Nearly 762 million ounces have been withdrawn from global reserves since 2021, proving that physical supply remains tight below the surface despite a temporary surge in spot liquidity.
तकनीकी आउटलुक: प्रमुख समर्थन और प्रतिरोध स्तर
From a chart perspective, silver showed signs of short covering. Open interest fell 1.15% to 16,683 contracts, while spot prices rose to Rs. 74, indicating that short sellers were cutting their positions.
Immediate assistance Rs. 193,140, with deep floor around Rs. 190,490. On the positive side, sellers are waiting near Rs. 197,820. If silver falls to Rs. Stay on top of. 197,820, prices may go up to Rs. 199,840. However, slipping below Rs. 193,140 will probably pull the metal down to test Rs. 190,490.
Key points for silver traders and physical investors
- Range Price Action:Short covering provided mild support, but major moves depend on the Fed's stance and Middle East news flows.
- Important levels to watch:Keep Rs. 197,820 and Rs 197,820 are on your radar for an upside breakout. 193,140 as a primary floor to avoid sharp drops.
- Tight Body Supply:Despite slowing short-term industrial demand, multi-year supply deficits and shrinking global vault reserves provide solid underlying support for long-term bullion holders.