Silver Prices Decline Amid Eased US Inflation and Renewed Middle East Tensions

Silver prices settled lower by 1% at ₹235,447 due to the US dollar remaining steady after US inflation data showed a mild easing in annual headline and core inflation. This reduction in pressure on the Federal Reserve to raise interest rates is a key factor behind the decline. The US producer prices were unchanged in July, while core producer prices rose 0.2% month-on-month.

However, renewed Middle East tensions remain a potential inflationary risk, particularly if disruptions to energy supplies push oil prices higher and complicate the Federal Reserve's policy outlook. Silver continues to receive structural support from industrial applications, including solar-panel manufacturing, electronics, electric vehicles, and electricity-grid investment.

Chinese imports of silver-bearing ores surged 62.5% year-on-year in June to 219,000 tonnes, highlighting continued industrial activity. The global silver market is expected to remain in a structural deficit for a sixth consecutive year, with the deficit projected to widen to 46.3 million ounces in 2026 from 40.3 million ounces in 2025.

The technical analysis suggests that the market remains under fresh selling pressure, with open interest rising 1.35% to 10,816 contracts alongside a ₹2,388 decline in prices. Silver is currently supported near ₹233,500, and a break below this level could expose ₹231,550.