Silver Prices Gain on Easing Government Bond Sell-Off and Oil Price Retreat
Silver prices gained traction on Wednesday, rising by 0.52% to ₹234,696 as investors breathed a sigh of relief following reports that Iran has submitted a proposal to the United States to end the war and reopen the Strait of Hormuz within seven days.
The easing of the government bond sell-off and retreat in oil prices also supported sentiment, but upside remained constrained by expectations of further Federal Reserve tightening. The Fed raised rates by 25 basis points last week to 3.75%-4.00%, with 16 of 18 policymakers projecting at least one additional hike this year.
The global silver market is expected to remain structurally undersupplied for a sixth consecutive year, with 762 million ounces drawn from stocks since 2021. Despite a 2% decline in total demand, the 2026 deficit is forecast to widen to 46.3 million ounces from 40.3 million ounces in 2025.
Industrial fabrication is projected to fall 3% to a four-year low amid weaker economic growth risks, while coin and bar demand is expected to rise 18%, supported by stronger US buying. Total supply is forecast to decline 2% as producer hedging normalises.