Silver: Consolidation near resistance as positioning builds – OCBC

OCBC's Christopher Wong views silver as a constructive market with potential for increased participation, as ETF holdings and managed-money positioning have risen from low levels. Technical analysis indicates a mildly bullish bias, but momentum is weakening near the 70.60-72 resistance band. A decisive move above this range, possibly necessitating lower yields and a weaker dollar, could propel silver to the 80.30 level.

However, silver's momentum has also trailed behind gold following a rapid rebound earlier in the month. Weekly data indicates a surge in ETF holdings and a rise in managed-money net positioning. Importantly, futures positioning remains significantly lower than gold's, suggesting ample room for fresh interest if the precious metals rally resumes.

This short covering of shorts rather than new long positions implies conviction is not yet fully developed, leaving room for positioning to expand further should the macro environment improve. The recent week has seen silver prices consolidating near a key resistance level. While there is still mild bullish momentum on the daily chart, signs point to its fading as the RSI nears overbought territory.

OCBC maintains a constructive stance but believes a more significant upward extension would require renewed weakness in yields, the USD, and a clear break above the 70.60-72 resistance area. A break above this zone would provide stronger confirmation of the recovery's capacity for further growth, potentially targeting the 80.30 level (38.2% Fibonacci retracement of the 2026 high to low range).

Support is present at the 61.30-62 area (21 and 50-day moving averages) before testing the 54-55 levels (2026 low). A downtrend breach would negate the recovery bias.