DBT Bureau
Pune, 6 Sep 2026
Silver enters the coming months amid a mixed outlook, with a persistent global supply deficit and improving seasonal and festive demand offering strong support, while a hawkish Federal Reserve, a stronger U.S. dollar and rising bond yields continue to weigh on prices. Global silver demand is expected to exceed supply for a sixth consecutive year, while forecasts of a wider 2026 deficit, stronger speculative positioning and potential Diwali-driven demand provide upside opportunities. However, renewed inflationary pressures from higher oil prices, declining ETF inflows and weak Indian imports could keep silver volatile and under pressure in the near term.
STRENGTHS
● Total global silver demand commands 1,112.6 million ounces against supply of 1,066.4 million ounces.
● U.S. Treasury’s move to expand and double buyback operations for longer-dated Treasury debt lowered long-term bond yields.
● Sustained debate over expanding U.S. federal debt beyond $40 trillion fueled currency debasement trades.
● Continued Middle East conflict could re-establish the “war premium” if diplomacy attempts eventually fail.
● The silver market is heading for a sixth year of structural deficit, raising the risk of a renewed liquidity squeeze.
WEAKNESSES
● Silver tumbled in last 10 days by 9%, made a low of 2,31,811 as hawkish Federal Reserve rate outlook pushed US Dollar Index to 99.80.
● US 10-year Treasury note climbed above 4.8%, moving toward its highest level since October 2023 as surging oil prices intensified inflation concerns
● Fed Chairman Kevin Warsh signaled the Fed may need to hike rates.
● Silver ETF inflows fell sharply in July to Rs 1,285 crore from June’s Rs 4,286 crore.
● India’s silver imports dipped 66.1 per cent to $171.68 million in July, the data showed.
OPPORTUNITIES
● Global silver structural deficit is forecast to widen 15% to 46.3 million ounces in 2026.
● J.P. Morgan Global Research forecasts the price of silver will averaging $70/oz for the year
● Speculators increased their net long positions in COMEX silver by 2,467 contracts to 13,235 contracts.
● As per seasonality, five-year average performance from September to December indicates a potential rise of more than 20% in prices.
● Upcoming Diwali festive season could boost Indian quarterly retail silver fabrication uptake by 25%.
THREATS
Prices may remain under pressure as escalating Middle East conflict lifted oil prices, stoking inflation and rate-hike fears.
● Traders are currently pricing in a 68% chance of a rate hike at the Federal Reserve’s policy meeting this month.
● Fed Governor Michael Barr said if inflation does not cool quickly, it will be time for the central bank to raise rates.
● As per daily chart, RSI is moving down and MACD bearish crossover given.
● A stronger-than-projected August employment report would reinforce labor market resilience, could reduce pressure for Fed dovishness.
Disclaimer : Investment in securities & commodities market are subject to market risks, read all the related documents carefully before investing
Source: Kedia Stocks & Commodities Research Pvt. Ltd.
