Spot silver has risen to $66.79 on August 11, marking its highest level since June 22, following a whopping 12% surge last week as reported by Mirae Asset ShareKhan. However, the metal has since declined to $64.73 at the time of writing, down 0.90% for the day due to profit booking after the July US CPI report matched estimates. Praveen Singh of Mirae Asset ShareKhan expects silver to consolidate its gains with an upward bias, with traders advised to buy dips with a stop loss below $62.90 for a target of $68. This represents a significant recovery from the 48% correction from silver's 2026 peak that had previously impacted the metal's performance. Jateen Trivedi from LKP Securities notes that gold traded higher this week, gaining 1% with the rally extending more than 2% at the peak before profit-booking emerged at higher levels. MCX silver for September contract gained ₹4,458, or 1.9% to ₹2.35 lakh per kilogram, while Comex silver went up $1.61, or 2.5% to $65.11 an ounce in New York. MCX gold has gained nearly 9.5% in August, making consolidation and intermittent profit-booking at higher levels more likely in the near term.
Fed rate hike probability for the September FOMC meeting has declined sharply from 75% a month ago to 35%, while the probability of the Fed hiking the benchmark rate by year-end has fallen from 90% to 70%, according to Mirae Asset ShareKhan. The much-awaited July US CPI report showed a disinflationary trend with headline CPI edging lower from 3.5% in June to 3.4% in July, trailing the estimate of 3.5%, while core CPI cooled from 2.6% in June to 2.5% (forecast 2.5%). The World Gold Council's July 2026 survey shows that central banks expect global gold reserves to increase over the next 12 months, while China has continued adding gold to its reserves, extending its buying streak to 20 consecutive months as of May. Pranav Mer from JM Financial Services expects the outlook for gold and silver to remain positive, with prices moving up towards ₹1.57 lakh per 10 grams and ₹2.54 lakh per kg level. Bullion prices found support as traders reduced bets on a September rate hike by the US Fed following weaker than expected non-farm payroll data and steady inflation, while other economic indicators remained mixed. Safe-haven demand also supported gold amid the West Asia conflict and the US-Iran tensions over the Strait of Hormuz, with no resolution to the conflict in sight.
Total known global silver ETF holdings stand at 797 Moz, up 2% from the cycle low of 781 Moz reached on July 14, as investors once again began piling into the metal on expectations that the US Federal Reserve will be less hawkish, reports Mirae Asset ShareKhan. However, ETF holdings are still down over 7% year-to-date and 4% since the beginning of the Iran war in February-end. Registered COMEX Silver inventory at 99 MOz is up 3% from the cycle low of 75.71 MOz reached in April, but remains down over 50% from the record peak of 201 MOz seen in September last year. Shanghai on warrant daily total silver stock has surged over 400% from the cycle low of 252 tons seen in March. On the domestic front, gold futures for October delivery gained ₹2,686, or nearly 2% last week to close at ₹1.54 lakh per 10 grams on the Multi Commodity Exchange (MCX). Silver futures for September delivery rose ₹4,458, or 1.9% to ₹2.35 lakh per kilogram.
Silver faces demand destruction at elevated prices due to its substantial industrial demand component across sectors including solar panels, semiconductors, electric vehicles, batteries, electronics, AI infrastructure and green energy systems. As reported by 1 Finance Research, when prices rise too rapidly, industrial buyers often temporarily delay procurement or reduce purchases, creating short-term market pressure. However, fundamentally, silver continues to enjoy strong tailwinds with demand from solar energy, electric vehicles and electronics remaining robust. Chinese imports of silver containing ores jumped 62.5% year-on-year in June to 219,000 tons on industrial demand as the nation expands its solar manufacturing capacity and power grid infrastructure, according to Mirae Asset ShareKhan. China has a significant presence across the silver supply chain, accounting for around 11% of global silver reserves and controlling 60-70% of refining capacity. According to The Hindu BusinessLine, gold futures closed higher for the second consecutive week but remained consolidative after an 11% rally from below USD 4,000 per ounce, with the US dollar, interest-rate expectations and geopolitical developments remaining key drivers for bullion prices.
Silver has been in a supply deficit for five consecutive years and has now entered its sixth year of structural shortfall, according to the report. The International Energy Agency has revised its Q3 oil deficit higher from 0.80 mbpd to 1.8 mbpd, though it sees the oil market tipping into a surplus of 4.6 mbpd in 2027. The one-month LBMA lease rate at -0.16% does not reflect any immediate supply concerns, with the long-term lease rate average being 0.3-0.6%. Markets will keep an eye on US housing and trade data, inflation figures from the UK, Eurozone and Japan, and China's economic indicators for cues on industrial metals, as reported by PTI. The minutes of the Federal Reserve's FOMC meeting will also be closely watched for signals on the US central bank's monetary policy outlook. Tata Mutual Fund expects silver to consolidate in the short term as weaker global economic conditions weigh on industrial demand, with the slowdown in solar-related silver demand and liquidation of long positions easing some supply tightness.
