Silver outlook bearish in near-term; Analyst flag $72 as next key support

Performance:

• On April 23, spot silver swung in the wide range of $74.24-$78.37.
• The white metal, replicating the yellow metal's moves, has been up for four straight weeks. It closed with a weekly gain of 6.61 per cent at $80.89 in the week ending April 17 as it came close to our intended short-term target of $85. Since then, it has been under pressure on inflation worries, stoking rate concerns.
• At the time of writing this article, spot silver was trading at $76.11, down by 1.55 per cent for the day. 

Geopolitics and oil:

• The US President Trump has ordered to shoot the boats placing sea mines in the Strait of Hormuz.
• Despite the US calling Iran for peace talks, Iran has not shown any willingness to negotiate as the US blockade continues. In addition, handing over the enriched Uranium pile remains the most crucial point of contention.
• Fatih Birol, the head of the International Energy Agency (IEA), comparing the oil and gas supply crunch from the closure of the Strait of Hormuz with energy supply crises in 1973, 1979, and 2022, warned that the current energy crisis precipitated by the conflict in the Middle East is worse than any in recent history, and its impact will deepen the longer it goes on.

Dollar index and yields:

At the time of writing this article, the US Dollar Index at 98.05 was down by 0.05 per cent for the day. Both 2-year and 10-year yields were largely steady at 4.29 oer cent and 3.8 per cent, respectively.

 

ETF and COMEX Inventory:

• As of April 22, total known global silver ETF holdings stood at 798.55 MOz, down by 7.36 per cent year-to-date (Y-T-D). Holdings have declined by 4.1 per cent since the start of the Iran war as investors exited some of their positions on a firmer Dollar, reduced rate cut probability, and volatility.
• Registered COMEX silver inventory has slumped by 61 per cent to 79.27 MOz from the record peak of 201 MOz in September 2025.

China's silver inventory:

• SHFE on warrant silver stocks have recovered from around an 11-year low level of 252 tons to 648 tons -- a four-month high, but remain at the decade's low level as inventory is down by 80 per cent from the record peak of 3091 tons.
• Silver inventory at China's Shanghai Gold Exchange is at a decadal low, too.

LBMA lease rate:

One-month LBMA lease rate at 0.04 per cent does not reflect any pressing supply issues in the short run.

Sixth consecutive year of deficit:

• The global silver market is expected to remain in a deficit for a sixth consecutive year in 2026 amid robust demand for bars and coins, and declining supplies, according to the Silver Institute. 
• The 2026 deficit is projected to widen by 15 per cent to 46.3 million troy ounces.

Data roundup:

• US data released on April 23 were largely encouraging as although jobless claims at 214,000 were a touch higher from the prior data (208K) and the estimate (210,000). S&P global US manufacturing PMI jumped from 52.30 to 54 in April as even the services PMI improved from 49.8 to 51.30 (forecast 50.60).
• Earlier, UK CPI inflation was 3.3 per cent in March, up from 3 per cent in February, due to a rise in fuel costs driven by the surge in oil prices as the cost of filling up at the pump rose by 8.7 per cent. US March retail sales surged by the most in more than a year as gas prices jumped.

Upcoming data and events:

• Major US data on tap in the near term include University of Michigan sentiment and inflation expectations (April 24), ADP weekly employment change (April 28), Conference Board consumer confidence (April 28), real personal spending (April 30), PCE Price Index (April 30), and Q1 annualised GDP (April 30). PCE Price Index, the Fed's preferred inflation gauge, is expected to see a sharp rise in inflation from 2.8 per cent in February to 3.5 per cent in March due to a surge in oil prices on the Iran war.
• The US Federal Reserve delivers its monetary policy decision on April 29, wherein it is expected to keep the rates unchanged at 3.5 per cent-3.75 per cent; however, investors will look for clues to the possible rate path in the future as a surge in inflation has made the global central banks vigilant against the inflation risk.
• The Bank of England will announce its monetary policy on April 30 and is expected to keep its benchmark rate unchanged at 3.75 per cent. Nonetheless, investors will seek clues to the future rate path as inflation is picking up. The ECB's policy decision is due on the same day, and the central bank is expected to stand pat on the key rate. Before that, the Bank of Japan will convene its monetary policy meeting on April 28. The Central Bank is widely expected to keep the benchmark rate steady at 0.75 per cent. However, market participants expect the Bank of Japan, the ECB, and the BoE to hike rates by 2.3, 2.35, and 2.17 times by the year-end. The Fed is expected to deliver 0.30 rate cuts by the end of the year-end.

Outlook:

• Heightened US-Iran tensions and the Hormuz issue will cap the upside in the metal as expected off-ramp by the US President has not occurred, though risk assets continued to be well bid as US indices hit record highs.
• Silver can test support around $72 should bears take out the key level of $74.50. Upside may be capped at around $79 for a very short term.
• Overall, near-term bias is slightly bearish but given the flux of news flow and reigning uncertainty, a strict stop-loss is a must.

Disclaimers: This article is by Praveen Singh, head of commodities, Mirae Asset ShareKhan. Views expressed are his own.