EJFQ Technical Analysis | Silver Bull Awakening Shows Signs of Recovery, Not Suitable for Long-term Holding After Rebound

While Wall Street stocks continue to hit new highs, the S&P 500 index again reached an all-time high on Monday (11th). However, after a strong surge in April, the gains since May have been only 2.83%, making it hard to catch up with silver’s 16.69% spike over the same period.

International silver prices jumped 7.12% on Monday, closing at $86.0574 per ounce. Based on the low of $67.945 on March 20, this translates to a cumulative gain of 26.6%. It successfully broke through the 20% threshold of a technical bull market, and the weakness seen since late January’s “one-day bear” (a peak decline of more than 20%) now appears to be showing signs of reversal.

As shown in the 【chart】, silver first climbed above the 100-day moving average and the downward trendline of a narrowing triangle. The 10-day line quickly rose through the 20-day and 50-day lines. It is expected to challenge $91.33, which corresponds to a 50% retracement ratio of the rebound. If this resistance can be broken through successfully, silver prices will fully recoup all losses since the US-Iran war began in late February.

There are signs that the silver bull is waking up. First, recently, Indian Prime Minister Modi called on the country to reduce purchases of gold (the largest import item after oil) for at least one year, to help the country preserve foreign exchange reserves. As a substitute for gold—which is priced far below gold—consumers shift toward increasing purchases of silver jewelry and silver coins, which naturally benefits silver prices. In addition, Peru, the world’s third-largest silver-producing country, is currently facing a crisis of natural gas and electricity shortages. The government announced that the country is entering an energy emergency status; concerns that industrial electricity supply restrictions may be limited—or may directly affect mining operations—have triggered supply disruptions.

In October 2025, a wave of silver speculation swept in. The price per ounce surged from $45.5568 to $121.654. After many months, retail investors’ appetite to enter the market has largely cooled. According to Bloomberg data, the trading volume of call options for iShares Silver Trust (SLV), the largest physical silver ETF by asset size, has fallen back to levels seen when the market was crazily snapping up shares at the end of last year. This can be viewed as investor sentiment returning to rationality, and may help the silver bull market move higher further.

However, abundant short-term tailwinds do not mean silver’s uptrend has been firmly established. Data compiled by the US Commodity Futures Trading Commission (CFTC) shows that, as of May 5, the number of net long positions in silver contracts held by managed money is only 40,535. Compared with the March trough, that is an increase of about 6%, but versus last year’s peak it is still down by more than 50%, indicating that the recent sharp rise in silver prices is driven more by technical buying and short-covering.

On the other hand, Bloomberg’s aggregated data indicates that total global silver ETF holdings are only 791.6 million ounces, the lowest level since after the third quarter last year. This implies that capital has not yet returned in large amounts. Without the participation of core buyers (especially ETFs), expectations for the silver market in the near term should not be too high.

In fact, the medium- to long-term outlook for silver still faces clear headwinds. At present, central banks in various countries (especially the Federal Reserve) are turning hawkish, causing global government bond yields to generally test their highest levels within the year, which will weaken the appeal of non-yielding assets such as precious metals.

Therefore, if investors are betting on a rebound in silver prices, it is best to deploy only short-term strategies and strictly adhere to stop-loss measures. For medium- to long-term allocation, it is advisable to wait until interest rate expectations become clearer and ETF funds continue to flow in. After all, it seems that the favorable factors for the silver market are insufficient to offset the structural pressure brought about by tightening global monetary policy.

HSBC Investment Research Department

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