Silver: Industrial risks persist as the recovery advances – OCBC

Silver led the recovery in precious metals with a gain of nearly 5%, as a weaker USD and lower yields supported the sector, according to OCBC strategists Sim Moh Siong and Christopher Wong. Silver’s greater sensitivity to monetary conditions and the earlier positioning washout helped drive the rebound. Despite improving sentiment, the bank cautions that an uneven industrial demand outlook, particularly in photovoltaics, could limit further gains unless USD strength and real yields decline further.

Could industrial demand curb Silver’s outperformance?

"Silver outperformed gold, gaining nearly 5% as the broader precious metals complex recovered."

"The rebound was likely amplified by silver’s greater sensitivity to changes in monetary conditions and reduced speculative positioning following October’s sharp correction."

"While the improvement in sentiment is encouraging, the industrial demand outlook remains mixed, particularly with continued thrifting and substitution in photovoltaic applications."

"Immediate resistance at 54.1/ 55.2 levels (23.6% fibo retracement of Aug high to Nov low), 57.40 (38.2% fibo). Clearing those hurdles cleanly may be needed for sentiment to stabilise. Support at 48 levels."

"Mild bearish momentum shows signs of fading while RSI rose."

"Further easing in USD strength and real yields could see silver extend its recovery alongside gold, although industrial demand concerns may temper the pace of gains."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Learn more.)