India's Tax Review and Middle East Flashpoints Put Silver's $60 Floor to the Test

Silver settled at $60.71 an ounce Friday, below its 50- and 200-day averages, as India weighs ending a GST exemption and Yemen fighting lifts haven demand.

Silver traders returned to their desks this week juggling two very different sources of pressure: a looming tax decision in New Delhi that could sap demand from one of the metal's biggest buyers, and fresh military escalation around the Bab-el-Mandeb strait that has revived appetite for hard assets.

The COMEX front-month contract finished Friday at $60.71 an ounce, a level that leaves the metal below both its 50-day average of $65.51 and its 200-day average of $70.83 — roughly 14% beneath the longer-term trend line. A modest rebound surfaced in Asian hours on Monday, though the broader chart picture remains bruised after a week in which futures shed more than 6%.

New Delhi Weighs Ending a Seven-Year Exemption

The week's most concrete catalyst sits in India, where the GST Council meets Wednesday to decide the fate of a carve-out that has shielded bullion banks and designated state agencies from the 3% integrated goods and services tax on gold, silver and platinum imports since 2017. Strip that privilege away and those institutions would face the same tax treatment as private trading venues.

Officials in New Delhi frame the move as a way to slow the drain on foreign exchange reserves. For the physical silver market, it represents yet another headwind from a region that has already been pulling back. India slashed import duties on silver from 6% to 15% in May — a steep markup that has left its mark: between April and August, inbound shipments contracted 8.81% to $1.74 billion. Industry observers caution that fresh levies would lift banks' funding costs, with those expenses ultimately passed down to fabricators and retail buyers.

Yemen Offensive and Stalled Iran Talks Revive the Safety Bid

Geopolitics is pulling in the opposite direction. Reports of an offensive by Yemeni government forces, backed by Saudi Arabia, against Houthi militias — alongside strikes on maritime infrastructure near the strategically vital Bab-el-Mandeb — have rekindled demand for crisis-resistant assets. Gold is drawing the usual flight capital, and silver is tagging along.

The threat to Red Sea shipping lanes has pushed supply-risk concerns back to the fore, and clashes over key transport corridors and energy installations are feeding inflation anxiety in oil markets — historically a tailwind for tangible stores of value. Analyst Manoj Kumar Jain has mapped the technical terrain: a sustained break above $62.40 an ounce would unlock fresh upside, while $59.10 marks the key support floor. With diplomatic talks between Washington and Tehran still deadlocked, Jain counsels against piling into speculative positions for now.

Rate Path Leaves Traders Guessing

On the monetary side, the picture is muddier. Yields on US Treasuries have eased slightly, offering some relief to the non-yielding metal. A softer-than-expected US jobs report has sharply reduced the odds of a follow-up rate move at October's meeting, yet Chicago Fed's Austan Goolsbee continues to insist that every option stays on the table. Futures markets, for their part, still treat a further tightening by December as the dominant scenario — a stance shaped by the Federal Reserve's decision to raise its benchmark rate a little over three weeks ago.

JPMorgan Sees $60–$65 Average

Adding to the mix, JPMorgan has pegged its average silver price forecast for the current projection window at $60 to $65 per troy ounce. The US bank ties its more cautious stance on precious metals chiefly to their sensitivity to real interest rates.

What happens next hinges on two scheduled releases: US services-sector data and the minutes of the Fed's last meeting, both due Wednesday. Until India's tax verdict lands, overseas demand offers little in the way of a dependable prop for prices.