Silver Report As On 03112025 by Amit Gupta, Kedia Advisory
Price Performance & Fundamentals: Silver dropped nearly 12.6%, retreating below $48 after touching record highs near $54.46, as investors booked profits following an exceptional rally. The fall was intensified by a stronger US dollar, fading festival demand in India, and shifting global sentiment. Despite the correction, silver remains significantly higher year-to-date, underpinned by strong physical demand, expectations of Fed easing, and heightened safe-haven interest amid lingering global uncertainties.
Volatility: Volatility surged sharply after silver’s record highs, mirroring intense speculative activity and wide price fluctuations. The heightened volatility signals market indecision, suggesting short-term traders must stay cautious as the metal seeks equilibrium following its steep decline
RSI (Relative Strength Index): RSI readings have fallen from extreme overbought zones, confirming momentum loss post the record rally. The indicator currently points toward consolidation, with potential for rebound once prices approach key oversold thresholds around the lower support region.
Vortex Indicator: The Vortex Index shows a negative crossover, affirming short-term bearish momentum after the vertical rally. This pattern typically signals extended correction phases, though a reversal in trend strength may re-emerge if prices hold above the critical medium-term supports.
Ulcer Index: The Ulcer Index has risen considerably, reflecting increased investor anxiety and drawdown pressure. Elevated readings suggest heightened market discomfort, often seen before stabilization phases. Sustained high Ulcer readings may indicate short-term capitulation before a base forms.
Elliott Wave Analysis: The Elliott Wave framework indicates completion of a major impulse wave near $54.50, followed by a corrective phase likely unfolding as ABC retracement. The present pullback appears corrective within a longer-term uptrend, and the next wave could resume once price stability returns near support.
Fundamental
Price Performance
Highlights
* Silver surged to a record high of $54.45 (Rs.170,415 on MCX) amid a short squeeze and liquidity crunch in London.
* Gains were supported by expectations of further Fed rate cuts and strong safe-haven demand.
* Weaker US CPI data strengthened the case for lower interest rates, while the Fed’s 25-bps cut to 3.75%–4.00% added momentum.
* The US government shutdown, now in its fifth week, fueled economic uncertainty and investor caution.
* Silver later corrected over 16% to $45.70 as rate-cut optimism faded and a US–China trade truce reduced safe-haven appeal.
* Fed Chair Powell’s cautious comments and a stronger US dollar kept pressure on prices.
* China’s Manufacturing PMI slipped to 49.0, highlighting weak industrial demand for silver.
* The global silver market is projected to stay in deficit for the fifth consecutive year, though the gap may narrow 21% to 117.6M oz in 2025.
* LBMA forecasts silver near $59.10 in 12 months, while UBS expects the gold-silver ratio to move toward 76, showing relative strength in silver.
* Citi cut its short-term price target to $42 from $55, as technical indicators (RSI, MACD) show momentum weakening after the sharp rally.
Technical
Volatility
RSI
Vortex
Ulcer Index
Elliot Wave
Conclusion
Price Performance & Fundamentals: Silver corrected sharply by over 16%, retreating from its record high of $54.45 (Rs.170,415 on MCX) to $45.70, as rate-cut optimism faded and the US–China trade truce reduced safe-haven appeal. The Fed’s cautious stance, stronger dollar, and soft Chinese industrial demand also pressured prices. Despite the correction, silver remains supported by persistent global supply deficits and ongoing investment inflows, positioning it for renewed strength once macro sentiment stabilizes.
Volatility: Volatility surged following the steep retracement, reflecting heavy profit-booking and speculative unwinding. The broader trend remains intact, but short-term instability suggests a consolidation phase before any sustainable rebound. Traders should continue employing tight risk management as price swings may remain elevated in the near term.
RSI (Relative Strength Index): RSI readings have fallen from overbought territory, confirming the loss of upward momentum and a near-term corrective bias. The indicator now approaches neutral-to-oversold zones, implying potential for technical recovery once support levels hold.
Vortex Indicator: The Vortex indicator highlights a bearish crossover, validating the current corrective move. However, declining negative momentum and flattening trendlines indicate that downward strength is weakening, hinting at potential bottom formation around key supports.
Ulcer Index: The Ulcer Index has spiked, emphasizing rising investor unease and drawdown pressure. Historically, such elevated readings have marked short-term capitulation zones, often preceding a price rebound as selling pressure exhausts.
Elliott Wave Analysis: Elliott Wave structure suggests silver may have completed a Wave V top and is now undergoing an A–B–C correction phase. This move appears to be a healthy retracement within the long-term bullish framework, likely offering accumulation opportunities around the mid-$40 support range.
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