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Praveen Singh, head of commodities at Mirae Asset Sharekhan
Performance
Spot silver fell to a one-year low of $48.61 on November 3 amid rate-hike concerns, elevated inflation, and high oil prices.
The metal recovered sharply following the US midterm election results, surging to $53.47 on November 5, its highest level since October 29. However, it subsequently erased most of its intraday gains as risk sentiment deteriorated, with the Nasdaq tumbling more than 5% points amid a continued selloff in chip stocks. A rebound of more than 2% in oil prices also weighed on silver.
At the time of writing, silver was trading marginally higher for the day at $52.31.
Oil and geopolitics
The US President’s acknowledgement that the Iran war contributed to Republican losses in the midterm elections, along with VP Vance’s comments linking the defeat to the Iran war and Israel ties, fuelled expectations that the US could come under greater pressure to reach a deal with Iran.
Implications of US midterm elections
The election outcome has mixed implications for silver. Lower oil prices and Treasury yields are supportive for precious metals. However, Democratic control of Congress could increase scrutiny of AI and data-centre investment, potentially tempering the pace of AI-related capital expenditure.
Slower AI/data-centre investment and weaker capital spending could weigh on silver’s industrial-demand outlook, partly offsetting the support from lower yields and a softer dollar.
Data roundup
Initial US jobless claims fell to 189K, a fresh decadal low, while continuing claims edged higher to 1,718K from 1,695K. Weekly labour-market data continue to point to resilience in a “low-hire, low-fire” environment.
October ISM manufacturing rose to a three-month high of 55.5, above the estimate of 54.5, as new orders and employment increased more than expected. Price pressures eased slightly but remained elevated.
ISM services slipped to a three-month low of 54.5, slightly below the estimate of 54.8, but remained at a healthy level. Price pressures remained elevated.
Dollar index and yields
The Dollar index fell to 101.09 following the US midterm election results amid expectations that congressional gridlock and a potential slowdown in AI-related investment could weigh on the US growth outlook. The index subsequently recovered as yields firmed on November 5. At the time of writing, it was hovering around 101.44, down 0.05 per cent for the day.
As US equities came under heavy pressure on November 5, the two-year Treasury yield fell to 4.52 per cent, its lowest level in almost a month, while the 10-year yield declined to 4.83 per cent, a two-month low.
Central bank Watch
As anticipated, the Bank of England raised Bank Rate by 25 bps to 4 per cent, its first hike since 2023. The MPC voted 8-1 for the 25-bp increase, with external member Catherine Mann preferring a larger 50-bp hike to 4.25 per cent.
The BoE expects inflation to rise to around 5 per cent by mid-2027 before subsequently declining as the impact of elevated energy prices fades and restrictive monetary policy weighs on inflation.
Cleveland Fed President Beth Hammack, one of the two FOMC members who voted in favour of a rate hike at the October 28 meeting, reiterated her call for small rate increases to tame inflation in a November 5 speech. She said smaller hikes would be less disruptive to households, financial markets and businesses.
Richmond Fed President Tom Barkin said further rate hikes are needed to control inflation, although he remains uncertain about the appropriate pace and magnitude.
New York Fed President John Williams will participate in a moderated discussion organised by the ECB in Germany. He is also scheduled to participate in a discussion organised by UC Berkeley in New York on November 13.
Traders will also monitor speeches from several other Fed officials, including Fed Governor Christopher Waller, next week.
Fed rate-hike probability
Implied overnight rates indicate a 74 per cent probability of a Fed rate hike in December, while the rates curve has shifted lower, suggesting expectations for a less hawkish Fed path further out. Markets currently price around 2.22 Fed rate hikes by October 2027.
ETF and COMEX inventory
As of November 4, total known global silver ETF holdings stood at 815.86 Moz, their highest level since March 11. ETFs recorded net inflows of nearly 7 Moz, or 218 tonnes, since October 30 as silver fell below $50.
Nevertheless, holdings remain 6.11 per cent lower Y-T-D, in sharp contrast to gold ETF flows. Since the beginning of the Iran war, silver ETFs have recorded net outflows of nearly 15 Moz, or 467 tonnes.
As of November 5, registered COMEX silver inventory stood at 103.65 Moz, down around 48 per cent from the record high of 201 Moz reached in September 2025.
Eligible COMEX inventories have declined by nearly 6 Moz since October 27, while registered inventories have increased by around 4 Moz, indicating metal has shifted from the eligible to the registered category, potentially increasing the amount available for delivery. Decline in eligible could also indicate withdrawal from the warehouse.
China silver inventory
Shanghai Futures Exchange warrant stocks stood at 1,380 tonnes, up around 450 per cent from the decadal low reached in March. The substantial rebuilding of exchange inventories is a bearish signal for silver, particularly compared with the physical tightness seen earlier in the year.
One-month LBMA spread
The one-month LBMA spread at around 0.05 per cent shows little evidence of material physical supply tightness.
Upcoming data
Major US data releases in the near term include October nonfarm payrolls and November preliminary University of Michigan consumer sentiment and inflation expectations on November 6; October New York Fed inflation expectations on November 9; October CPI on November 10; October existing-home sales on November 12; and October PPI on November 13.
In Europe, attention will be on Q3 UK GDP on November 12, followed by Q3 Eurozone GDP and employment on November 13.
Key Asian releases include China’s October inflation data on November 9 and October trade balance on November 10.
Silver price outlook
Silver remains under significant downside pressure after breaking below support around $54.50. A sustained recovery above $55 is needed to ease the current selling pressure.
The US midterm election outcome presents mixed signals for silver. Lower yields and a softer dollar are supportive, but concerns that increased scrutiny could slow AI and data-centre investment may weigh on silver’s industrial-demand outlook. Weakness in technology equities could further pressure sentiment.
Meanwhile, there has been no material improvement in the underlying situation in West Asia, leaving oil prices vulnerable to renewed upside. A sustained rebound in oil could revive inflation and rate-hike concerns, limiting silver’s upside.
Silver may rebound towards resistance in the $54.50-$55 zone but could eventually retest support around $48 in the coming weeks/months unless oil prices decline sustainably, yields remain subdued, or gold extends its recovery.
Interim support is seen at $50, with resistance at $54.50-$55. Next major resistance is seen around $58.
For very short-term trading, one may buy the dips with strict stop loss and can play the range unless oil prices decline on a sustainable basis.
