Silver trading strategy: Here's how to trade Silver today; key levels here

Praveen Singh, head of currencies and commodities at Mirae Asset Sharekhan, sees a weakening US labour market as a potential source of concern for the metal

Silver: rallies on rate cut bets

Silver performance:

• Buoyed by a weaker Dollar surged to a fresh cycle high and a fresh 14-year high on September 10.
• The metal at the time of writing this article was changing hands at $41.61, up around 1.10 per cent for the day.
• The US Dollar Index weakened as the US CPI data were mostly in line with the estimates, and the weekly US job report reflected further weakness in the US job market.

Data roundup:

• Much-awaited US CPI report for August showed that US consumer price indicators rose mostly in line with the estimates. Although US inflation remains well above the Fed’s intended goal of 2 per cent, a Fed rate cut in September is certain as the US job market craters and inflation is still mostly rangebound.
• US inflation rose 2.9 per cent Y-o-Y in August versus the forecast of 2.9 per cent (prior 2.7 per cent), while headline inflation rose 0.4 per cent m-o-m (forecast 0.30 per cent, prior 0.2 per cent), the most since the start of the year. The core CPI increased 0.3 per cent from July, which was in line with the estimate and at the same level as recorded in July, while core CPI y-o-y rose 3.1 per cent in August, the same as estimated and recorded in July.
• Food and shelter prices contributed the most to August inflation. The food index rose 0.5 per cent over the month, while shelter prices picked up 0.4 per cent, the most since the start of the year.
• US weekly jobless claims spiked to 263K, a four-year high. The data underscores the weakness in the US market. Earlier on September 9, QCEW reported a massive downward revision of 911K jobs in the twelve months through March 2025.

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Fed rate cut probability:

• Following the release of the US data, traders have boosted their rate cut wagers as they now look for three rate cuts by the end of this year, as compared with two rate cuts.

Silver ETFs and COMEX inventory:

• Total known global silver ETF holdings at 801.86 MOz are up 12.30 per cent YTD and are at the highest level since November 2021. Silver holdings rose for four straight weeks before declining in the week ending September 5.
• COMEX Silver inventory currently at 523 MOz is at a record high level.

Dollar Index and yields:

• At the time of writing, the US Dollar Index is hovering around 97.53, down 0.30 per cent for the day.
• Two-year US yields at 3.51 per cent are down 0.85 per cent for the day, while ten-year US yields at 4.01 per cent are down 0.89 per cent.

Silver lease rates:

• The cost of borrowing silver in the London market on a short-term basis has spiked above 5 per cent for the fifth time this year. The historical average is near-zero.

Retail demand:

• As per the Silver Institute, retail silver investment flows show mixed characteristics. In Europe, the recovery from a low base that began in late 2024 has continued into 2025. Indian retail investment demand remains strong and has posted a 7 per cent year-over-year gain over the first six months of 2025. The US is seeing selling back by retail investors.

Silver outlook:

• As nearly 70 per cent of the metal’s usages lie in industrial applications, a weakening US labour market is a potential source of concern for the metal.
• Nonetheless, we expect the metal to reach $43 (MCX Silver December ₹131,000) mark in the coming weeks/months on robust ETF inflows amid rate cut expectations and healthy risk appetite.
• Support is at $41 (₹125,000)/$40 (₹122,000).

 

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(Disclaimer: Praveen Singh,  head of currencies and commodities at Mirae Asset Sharekhan. Views expressed are his own.)