Silver - Back From The Dead?
Back From The Dead
Silver looked broken just a few sessions ago. Now the metal is attempting a sharp reversal from major support after reaching its most oversold levels since the bull market began. The question is whether this is just a bounce, or the start of something bigger.
Big in silver
Silver has staged an aggressive reversal around the key $64 level. Both the early-February and late-March lows were marked by large hammer-like candles that bottomed in this area. Today's price action is starting to look very similar.
Importantly, silver briefly broke below its 200-day moving average a few sessions ago but is already attempting to reclaim it. Was the breakdown nothing more than a shakeout?
Source: LSEG Workspace
Oversold
Yesterday, silver reached its most oversold levels since the current bull market began. There is plenty of room for a squeeze higher before conditions start looking overbought again.
Source: LSEG Workspace
Deja vu?
Weekly silver candle looking very much like that late March bounce set up.
Source: LSEG Workspace
The rates connection
Silver remains highly rate sensitive. Sharp declines in U.S. 10-year yields have consistently coincided with silver rallies this year, a relationship highlighted in the chart.
Source: LSEG Workspace
The AI connection
You need silver to run those AI machines. AI is hardly the only driver of silver, but the divergence between the metal and the broader AI trade is becoming difficult to ignore.
Source: LSEG Workspace
Could they get excited again?
Speculative participation in silver remains surprisingly muted. A successful reversal from key support could be the catalyst that finally draws momentum traders back into the market.
Source: LSEG Workspace
CTAs in silver
Silver's recent selloff has reset systematic positioning. If the reversal gains traction, CTA buying could become part of the story again.
