Goldman Sachs: Silver Market Faces $2.2 Billion Sell-off and Dual Pressure

Goldman Sachs commodity strategist Robert Quinn noted in a recent report that the silver market remains in a stalemate. Over the past three weeks, managed funds have cumulatively net sold approximately $2.2 billion in silver futures, with net long positions dropping to the lowest level in Goldman Sachs' two-year data. The three-month silver put/call skew once rose to the 98th percentile of the one-year range, indicating a significant increase in market risk aversion. Silver is facing dual pressure from the dollar and industrial demand. From October 13 to 20, the dollar index fell by 0.5%, while silver dropped by 2.6%; during the same period, U.S. solar stocks fell by 4.7%, Chinese solar stocks declined by 1.6%, and data center-related stocks plummeted by 7.9% due to concerns over memory, new cloud computing, and credit risks, weakening market expectations for silver's industrial demand. Quinn pointed out that the risk aversion triggered by the AI sector sell-off could depress the dollar, but a deteriorating outlook for AI investments could hit silver's industrial demand, creating a mutually reinforcing negative feedback loop. Despite crowded short positions that may provide a tactical rebound opportunity for silver, the situation in Iran and its impact on oil prices and the dollar remain major obstacles. Goldman Sachs believes that easing tensions in the Strait of Hormuz or worsening AI credit risks could become key catalysts for silver to break the stalemate.

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