Silver's Slump: Rate Cut Hopes and Industrial Woes Test Metal's Resilience

Silver prices edged higher on Wednesday, November 19, 2025, but remained nearly 12.7% below their record high of ₹1,78,100 per kg set in mid-October, as investors grappled with expectations of Federal Reserve rate cuts and shifting industrial demand. MCX Silver December contracts rose 0.45% to ₹1,55,337 per kg by early morning trade, according to a report by LiveMint. The metal has swung between gains and losses in recent sessions, reflecting uncertainty over monetary policy and global economic conditions.

The decline from silver's peak follows three consecutive sessions of losses in early November, driven by heightened speculation that the Fed will ease interest rates amid signs of softening inflation. Analysts noted that while near-term volatility persists, structural supports remain intact. Ponmudi R, CEO of Enrich Money, observed that MCX Silver is finding near-term support around ₹1,55,000, with key resistance levels at ₹1,58,000 and ₹1,62,000. He emphasized that the broader macroeconomic environment, including potential Fed rate reductions, will likely dictate the metal's trajectory in coming months.

Industrial demand, a critical driver for silver, also remains under scrutiny. The metal's primary uses in electronics, solar panels, and medical devices have faced headwinds from slowing global manufacturing activity and trade tensions. However, analysts at Emkay Wealth Management suggested that silver's technical indicators point to potential rebounds. They highlighted a "strong support level" at $47.60 per ounce (approximately ₹1,47,000 per kg) and projected a possible recovery toward $52–$53 (₹1,58,000–₹1,60,000) if demand stabilizes.

The market's cautious tone was further underscored by recent developments in the mining sector. Aya Gold & Silver Inc., a Canadian producer with operations in Morocco, announced plans to commercialize a stockpile of silver-rich pyrite concentrate, aiming to generate cash flow while addressing environmental concerns. While the initiative does not directly influence global prices, it reflects broader industry efforts to optimize by-product recovery amid fluctuating commodity values.

Looking ahead, investors will closely monitor the U.S. non-farm payrolls report, delayed by the recent government shutdown, and minutes from the Fed's latest policy meeting. Fed Governor Christopher Waller's recent comments-suggesting companies are preparing for layoffs amid AI-driven productivity gains-have amplified expectations of rate cuts, which could further weigh on precious metals.

Despite near-term pressures, some analysts remain bullish on silver's long-term prospects. "Silver's dual role as both an industrial commodity and a hedge against inflation ensures its relevance in diversified portfolios," said Ponmudi, noting that tactical investments with medium-term horizons could benefit from potential rebounds. For now, however, the metal's path remains contingent on central bank actions and the pace of global economic recovery.

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