Silver Hits Fresh High on US Rate-Cut Expectations and Rising Safe-Haven Demand

Silver prices surged to a fresh high, supported by growing expectations of US interest rate cuts and increased safe-haven demand amid economic uncertainty and geopolitical tensions. According to market data, silver settled 7.15% higher at ₹2,39,787, marking a sharp upward move in the precious metals market.

Rate-Cut Expectations Boost Precious Metals

Market participants are increasingly pricing in two interest rate cuts by the US Federal Reserve next year, following a mixed set of economic indicators. While the US economy recorded a strong 4.3% annualized expansion in third-quarter GDP, softer consumer confidence readings in December and flat factory output in November have reinforced expectations of a more accommodative monetary policy stance.

Lower interest rate expectations tend to support non-yielding assets such as silver, improving their relative attractiveness for investors.

Geopolitical Tensions Add to Risk Premium

Silver prices also drew support from rising geopolitical risks. Sentiment strengthened after the United States ordered a blockade of sanctioned Venezuelan oil tankers, increasing risk premiums across global commodity markets. Such developments typically enhance demand for safe-haven assets, including precious metals.

Strong Year-to-Date Rally Driven by Structural Factors

On a year-to-date basis, silver has posted an exceptional rally of nearly 149%, underpinned by a structural supply deficit, robust industrial demand, and its classification as a US critical mineral. These long-term fundamentals have provided sustained support to prices.

Supply-side concerns have intensified as Chinese silver inventories declined to their lowest levels in a decade. Stocks held at Shanghai Futures Exchange warehouses fell to the lowest since 2015, while volumes at the Shanghai Gold Exchange dropped to a more than nine-year low.

The drawdown followed record Chinese silver exports exceeding 660 tonnes in October, tightening domestic availability. Although some pressure has eased through shipments to London, global liquidity remains constrained, with borrowing costs in the London market staying elevated.

Technical Outlook: Key Support and Resistance Levels

From a technical perspective, the silver market has witnessed short covering, with open interest declining 3.95% to 12,089 contracts, even as prices jumped by ₹15,997, indicating fresh buying momentum.

• Immediate support: ₹2,28,770

• Further downside support: ₹2,17,760

• Key resistance: ₹2,46,395

A sustained move above the resistance level could open the path toward ₹2,53,010, analysts said.

Outlook

With easing monetary policy expectations, persistent supply constraints, and elevated geopolitical risks, silver prices are likely to remain sensitive to macroeconomic data and global developments in the near term. Market participants will closely monitor upcoming US economic indicators and central bank signals for further direction.