Silver Report as on 06 April 2026 - Kedia Advisory
Price Performance
* Reasons for drop in prices from 120$
* Margin Shock: CME Group hiked margins ~20–30%, triggering leveraged long liquidation across markets.
* Profit Booking: After ~250% yearly rally, institutions exited longs, locking historic gains aggressively.
* Cascade Sell Off: Sharp declines triggered automated sell orders, accelerating global market-wide liquidation.
* Liquidity Crunch: Paper silver volumes exceeded physical demand, creating severe absorption imbalance globally.
* Mean Reversion: Silver corrected from extremely overbought levels toward historical average price bands.
* Policy Shift: Kevin Warsh nomination signaled stricter, hawkish monetary policy outlook ahead.
* Bond Yield Spike: US 10-year yields surged near 4.3%, hurting silver attractiveness.
* Dollar Strength: DXY rally made silver costlier globally, weakening international physical demand.
* Rate Cut Reset: Inflation persistence reduced expected 2026 Fed rate cuts significantly.
* Fear Trade Reversal: Dollar collapse narrative faded, reducing safe-haven demand for silver.
* Industrial Thrifting: Solar sector reduced silver usage, substituting cheaper metals like copper.
* Demand Pause: $100+ prices forced industries to delay procurement and reassess consumption.
* ETF Outflows: Heavy selling from ETFs in India, US amplified downside volatility.
Highlights
* Silver rallied over 5% in a week amid de-escalation hopes on rumors that Iran was prepared to make nuclear concessions to avoid US attacks.
* By April 2, Trump threatened that Iran would be "hit extremely hard" in the next 2-3 weeks, causing silver to tumble as the US Dollar rallied on war fears.
* US Dollar Index stability at 100 limits silver’s immediate breakout potential
* The Federal Reserve signaled that interest rate cuts for 2026 are "completely evaporated" due to war-driven inflation, weighing heavily on prices.
* The US Court struck down several of Trump’s tariffs, briefly weakening the USD and providing a temporary floor for silver.
* COMEX silver registered inventories slip below 90 million ounce threshold
* February silver imports into China reached an eight-year high of 206.76 metric tonnes, 49% month-on-month increase
* Global silver market faces sixth consecutive deficit of 67 million ounces in 2026
* Solar PV silver demand forecast to drop 7% as substitution efforts accelerate
* Silver recycling projected to surge 7% surpassing 200 million ounces
* Indian silverware demand expected to contract 17% due to price sensitivity
* Silver investment demand forecast to jump 20% to 227 million ounces
* Silver mine production in Mexico set for 1% growth driven by primary mines
* Indian silver ETFs record first net outflow in 27 months totaling Rs.826 crore
* J.P. Morgan projects 2026 silver average at $81/oz despite recent pullbacks
SWOT Analysis
* News
US Fed Interest Rate Outlook
The Federal Reserve’s monetary policy stance remains the primary driver of gold price prediction trends. In March 2026, rates stayed within the 3.5–3.75% range, with uncertainty around future rate cuts. Lower interest rates support gold by reducing the opportunity cost of holding non-yielding assets, while higher rates tend to weaken its appeal.
Inflation and Dollar Strength
The strength of the US dollar is another major factor. A stronger dollar makes gold more expensive globally, reducing demand. At the same time, inflation adds complexity; while it supports gold as a hedge, it can also lead to tighter monetary policy, indirectly pressuring prices.
Geopolitical Tensions and Impact of War
Geopolitical tensions have had a limited impact on gold prices recently. Instead of driving demand, rising oil prices and persistent inflation concerns have strengthened the dollar, offsetting traditional support for gold.
Trump Signals Potential End to Iran Conflict
President Donald Trump announced that United States military actions against Iran could potentially wrap up within two to three weeks. Notably, he stated that Tehran is not required to finalize a formal deal as a prerequisite for the de-escalation of the conflict. White House spokeswoman Karoline Leavitt confirmed that the President will provide a comprehensive update on the situation during a national address scheduled for Wednesday at 9 pm. This shift in stance has introduced a new wave of speculation across global financial markets.
Fundamentals
Global Silver Market Faces Sixth Consecutive Annual Deficit of 67 Million Ounces in 2026:
The Silver Institute forecasts that total supply will reach 1.05 billion ounces, failing to meet demand for the sixth straight year. This structural shortfall has exhausted over 800 million ounces of global reserves since 2021.
Global Mine Production Expected to Grow Only 1% to 820 Million Ounces in 2026:
New output from Morocco (Zgounder mine) and Chile (Salares Norte) is barely offsetting declines in Peru. Primary silver mines now account for only 28% of total supply, leaving the market reliant on base-metal byproducts.
The Silver Institute Forecasts 2% Decline in 2026 Industrial Fabrication Due to PV Thrifting:
Despite a 130% YoY price rally, the Silver Institute reports that solar manufacturers are cutting silver load-per-cell by 7-10%. Total industrial demand is expected to hover around 650 million ounces for the fiscal year.
Shanghai Silver Exchange Stocks Plunge to Decade Low of 318 Tonnes:
Inventories in China have dropped by nearly 10% in a single week, down from 349 tonnes. The acute shortage in the East has kept Shanghai premiums $10 per ounce above London spot, effectively sucking metal out of Western vaults.
Solar PV Silver Demand Forecast to Fall 7% as Manufacturers Pivot to Copper Substitution:
High silver prices (17-29% of module costs) have forced solar giants like Longi to accelerate "thrifting." Sector consumption is expected to drop to 194 million ounces this year despite expanding solar capacity.
Silver Jewelry Demand in India Dips 9% as Record High Prices Deter Retail Consumers:
While investment demand is up 20%, the physical jewelry sector is suffering. Indian consumers are reportedly shifting to lighter designs or delaying purchases.
Indian Silverware Demand Projected to Contract 17% in 2026 as Price Sensitivity Peaks:
High domestic rates above Rs.2.5 lakh/kg have severely impacted the gift-driven silverware market. In India, retail volume is down significantly, though this is being offset by a 20% surge in silver ETF and digital bar investment.
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