Silver may slide to $48 as momentum selling deepens: Mirae Asset Sharekhan

Disclaimer: This article is written by Praveen Singh, head of commodities at Mirae Asset Sharekhan. Views expressed are his own. Readers' discretion is advised. Silver remains under intense selling pressure, with the breach of key support at $54.50 opening the door to further declines towards $50 and $48. Despite falling US yields and tight COMEX inventories, bearish momentum and shifting investor sentiment continue to weigh on prices. While current levels may offer medium- to long-term accumulation opportunities, further near-term weakness cannot be ruled out.

 

Performance:

• Spot silver has been reeling under tremendous downside pressure that has intensified after the breach of the crucial support around $54.50. The white metal traded in the range of $51.99 and $54.39 on October 29. At the time of writing this article, it was exchanging hands at $52.48, down 2.77 per cent for the day.
• Silver has slumped nearly 27 per cent YTD and is down 13 per cent this month.

 

 

Oil and geopolitics:

• Crude oil prices fell on October 29 on the Wall Street Journal’s report that U.S. Vice President Vance has got in touch with Iranian Security Council chief Mohsen Rezaee in a bid to restart peace negotiations, according to the Wall Street Journal. The semi-official agency Tasnim reported that Rezaee has received a letter from Vance but is yet to respond to it.

 

Data roundup:

• US data dump on October 29 showed that 3Q GDP grew at a solid 3.4 per cent annualized rate, Vs the estimate of 3.2 per cent and the prior 2.2 per cent. The economic growth was boosted by business investments and consumer spending. Business investments climbed 12.7 per cent in Q3-- the most since 2020. Real personal spending in September cooled down from downwardly revised yet solid 0.5 per cent spending growth in August to 0 per cent, Vs the estimate of 0.1 per cent.
• Inflation rose further in September. PCE Price Index, the Fed's preferred gauge of inflation, rose 0.5 per cent m-o-m, the most since March and 3.6 per cent y-o-y, hottest since May. The inflation readings were in line with the estimates but it is a cold comfort as inflation not only remains much above the Fed’s goal of 2 per cent, it was also hotter than the August readings of 0.3 per cent m-o-m and 3.2 per cent y-o-y. Core PCE Price Index rose 0.3 per cent m-o-m and 3.1 per cent y-o-y -- in line with the forecasts, but hotter than the August readings of upwardly revised 0.3 per cent m-o-m and 3 per cent August readings. 3Q personal consumption at 3.8 per cent beat the estimate of 3.4 per cent and matched the prior reading. 3Q core PCE Price Index at 2.5 per cent was hotter than the expected 2.4 per cent. Initial jobless claims fell from 195K to 194K -- the lowest since July 17. UK mortgage approvals fell to 53,443 in September, lowest in thirty-three months, as key lending rate has risen to 6 per cent from 4.8 per cent seen before the start of the Iran war in February this year.

 

Dollar Index and yields:

• The US Dollar Index did not gain any upward traction from the FOMC's monetary policy decision as yields sank. The Index, at the time of writing this article, was hovering around 102, down 0.2 per cent for the day as it fell for the second straight day.
• Two-year yields fell for the second consecutive day. Twos at 4.66 per cent were down 3 bps for the day, Support is at 4.41 per cent. Ten-year yields at 4.99 per cent were down 2 bps. Support is at 4.78 per cent.

 

Central Bank Watch:

• Federal Reserve: As anticipated, the Fed left the funds rate unchanged at 3.75 per cent-4.00 per cent in its FOMC monetary policy concluded on October 28 but the decision carried a modest hawkish undertone. Lisa Cook and Beth Hammack dissented in favour of a 25-bp hike, while the Fed continued to characterize inflation as elevated. The assessment of economic activity was upgraded to a “strong pace,” with the Fed highlighting resilient domestic spending, strong productivity growth and robust capital investment. Overall, it was a balanced monetary policy decision.
• Probability of the US Federal Reserve hiking rates in December stands at 80 per cent. Market participants see the Central Bank hiking rates 2.6 times in a year, which is much lower from nearly 4 hikes seen around five weeks back.
• The Bank of Japan is expected to keep the rates steady at its monetary policy meeting on October 29.

 

Global Silver ETF:

• Total known global silver ETF holdings stood at 807.96 Moz as of October 28-- highest since March 16. Holdings have risen 3.45 per cent (839 tons) from the cycle low of 781 Moz noted on July 13 but are still down 7 per cent (1900 Moz) from the cycle peak of 869 Moz and are down 2.89 per cent (750 tons) since the start of the Iran war on February 28.

 

COMEX inventory:

• Registered silver inventory at COMEX warehouses stands at 99.79 Moz, down nearly 4 MOz from October 20. Inventories have slumped over 50 per cent from the cycle peak of 201 Moz seen in September 2025.

 

China's silver market:

• Shanghai Futures Exchange on warrant daily total silver inventory is noted at 1372 tons, down 119 tons from September 30, but inventories have surged 446 per cent from the decadal low of 251 tons seen in March.

 

One-month LBMA lease rate:

• One-month LBMA lease rate remains subdued at 0 per cent showing no immediate supply tightness.

 

Gold-silver ratio:

• Gold-silver ratio rose nearly 1.5 per cent to 76.57 on Thursday as silver has been falling more than gold. The ratio can rise to 84 in the coming days.

 

Upcoming data:

• Next week will be crucial for financial markets as US October ISM manufacturing (Nov. 2), September JOLTs job openings (Nov. 3), September final Durable goods orders (Nov. 3), October ADP employment change (November 4), October ISM services (Nov. 4), October nonfarm payroll (November 6) and Nov. preliminary University of Michigan sentiment and inflation expectations (Nov. 6) will be released.

 

Outlook:

• Spot silver has been falling sharply despite a pullback in US yields and real yields as crude oil moves and momentum selling dominate the trading sentiments. It is quite oversold at current levels; however, from trading perspective, it can extend its decline to $50/$48 in the coming weeks. Resistance is at $54.80/$55.40/$57.
• Silver is at attractive levels for stacking purpose on medium-to-long-term horizon but may fall further in short term. Traders buying gold over silver could have aggravated the sell-off in silver.
• It is advisable to sell into rallies with tight stop-loss.