Silver: Recovery extends but industrial risks linger – OCBC

OCBC’ strategists Sim Moh Siong and Christopher Wong report that Silver has outperformed Gold, gaining nearly 5% as precious metals recovered on a softer USD and lower yields. The rebound is linked to Silver’s higher sensitivity to monetary conditions and prior positioning washout. While sentiment has improved, the bank warns that mixed industrial demand, especially in photovoltaics, could temper further gains unless USD strength and real yields ease further.

Outperformance tempered by industrial demand

"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."