Silver: Consolidating Near Resistance Amid Rising Positions - OCBC

Spot silver is currently trading around $71.51, consolidating below a key technical resistance zone. OCBC analyst Christopher Wong sees a positive outlook for silver, noting that with ETF holdings and managed money positions recovering from lower levels, there remains room for the market to attract more participants. However, upside momentum near the $70.60-$72 resistance area is waning, and short-term consolidation may persist.

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**Improving Positions Provide Underlying Support**

The silver market previously experienced sustained ETF outflows, with ETF holdings falling 9.2% year-to-date at one point, but has recently shown tentative signs of stabilization. OCBC notes that short-term headwinds such as weak ETF demand, relatively high real yields, and subdued investor sentiment had previously outweighed long-term positives from structural supply deficits and industrial demand. The current recovery in positions from lows provides some support for silver prices at current levels.

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**Macro Factors Still Dominate Near-Term Direction**

Despite a slightly bullish technical picture, silver remains vulnerable to macro-driven pullbacks. OCBC states that if U.S. inflation data softens, labor market data weakens, or the Fed turns dovish, the silver outlook could improve; conversely, if economic data remains strong and inflation stays elevated, real yields may stay high, thereby delaying a sustained recovery in silver prices. The bank has previously significantly cut its silver forecast for end-2026, now expecting average prices to gradually rise from $64 per ounce to $74, reflecting a cautious assessment of repriced real rates and a stronger U.S. dollar.