Silver Rises as Fed Rate Hike Expectations Dim
Silver prices in India rose 0.97% to ₹225,877, supported by softer-than-expected US inflation data that lowered expectations of a Federal Reserve rate hike in October. The US PCE price index increased 0.3% in August, below forecasts of 0.4%, while core PCE rose 0.2%, missing expectations of 0.3%. The market now sees a 38% chance of an October rate hike, down from 51%, though December remains likely at 89%. Treasury yields stayed high amid energy-driven inflation concerns.
US jobless claims fell to 197,000, below expectations, signaling labor-market resilience. Fed officials expressed mixed views: Michael Barr backed further rate hikes, while Beth Hammack cited high energy prices and AI investment as factors behind elevated long-term yields. John Williams called another rate hike by year-end reasonable.
London silver vault holdings rose 0.5% month-on-month to 28,213 tonnes, valued at $52.7 billion. The global silver market faces a sixth straight deficit, with 762 million ounces drawn from stocks since 2021. The deficit is expected to widen to 46.3 million ounces by 2026, despite falling total demand by 2%. Industrial fabrication may decline 3%, but coin and bar demand could rise 18%. Total supply is forecast to fall 2%, supporting the deficit.
Silver remains far below its January record of $121.6 per ounce after a 147% surge in 2025. Technically, the market is under short covering, with open interest down 4.61% to 16,584. Prices found support near ₹224,295, with resistance at ₹227,175. A break below support could expose ₹222,715, while a move above resistance may push prices toward ₹228,475.