Former Silver Institute head Phil Baker noted that demand for the precious metal stands at roughly 1.2M ounces, while mine supply provides no more than 0.8M ounces. Ore recycling can add about 0.12–0.15M ounces, but unlike other resources, silver production peaked in 2016 and cannot expand further. This significant supply-demand imbalance will likely continue to support prices.
Speculative positions also remain bullish. According to the U.S. Commodity Futures Trading Commission (CFTC), long positions reached 53.1K, well above the 25K average. Silver futures volumes on the Chicago Mercantile Exchange (CME) have been rising again, hitting a yearly high of 166K contracts on September 2, compared to the August median of 68K. Options activity — used for both hedging and profit from short-term moves — has consistently exceeded 15K contracts, spiking to 29.97K on September 2, the second-highest level this year.
Support and resistance levels Forecast
On the daily chart, the instrument is moving just below the resistance line of the ascending channel with boundaries at 44.00–39.00.
Technical indicators strengthen the buy signal: the Alligator EMA range is trending upward, while the AO histogram is printing bullish bars in positive territory.
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Resistance levels: 41.90, 43.90
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Support levels: 40.50, 38.50
Trading scenarios
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Long positions may be opened after a breakout and consolidation above 41.90, targeting 43.90. Stop-loss at 41.00. Implementation horizon: 7+ days.
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Short positions may be opened after a decline and consolidation below 40.50, targeting 38.50. Stop-loss at 41.50.
Scenario
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Timeframe: Weekly
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Recommendation: BUY STOP
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Entry point: 41.90
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Take Profit: 43.90
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Stop Loss: 41.00
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Key levels: 38.50, 40.50, 41.90, 43.90
Alternative scenario
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Recommendation: SELL STOP
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Entry point: 40.50
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Take Profit: 38.50
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Stop Loss: 41.50
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Key levels: 38.50, 40.50, 41.90, 43.90