Silver between optimism and risk

Supply deficit

China has emerged as the dominant force in the global silver market, with buying activity reaching unprecedented levels in early 2026. Customs data released on Friday shows the country imported over 790 tons of silver in the first two months of the year, including nearly 470 tons in February alone, marking the highest February intake on record. Strong domestic demand has pushed local silver prices well above international benchmarks, depleting already-low exchange stockpiles and even drawing metal from abroad to meet industrial and investment needs.

This buying surge comes as China implements a tighter regulatory framework for silver exports. 44 companies have been authorized to export silver in 2026 and 2027, effective January 1, 2026. The policy prioritizes large, often state-affiliated firms, restricting smaller players and ensuring that the metal supports strategic initiatives in mining, electronics, solar energy, and other high-tech industries. By controlling exports, China not only secures domestic supply but also positions itself to influence global silver flows, tightening availability outside its borders.

Total global silver supply in 2026 is forecast to rise 1.5% to a decade-high of approximately 1.05 billion ounces, with mine production increasing 1% to 820 Moz

The combination of record imports and restrictive export policy is already reshaping global supply dynamics. With inventories on global exchanges at multi-year lows and physical silver being hoarded domestically, the market faces heightened volatility. Analysts predict that silver premiums in London, Shanghai, and Singapore could rise further as traders and

Source: MacroMicro

Technical outlook

The recent aggressive rally left silver heavily overextended, triggering a sharp sell-off, followed by a lower-high rejection at 96.30. This marked a clear shift from a vertical, momentum-driven surge to a more structured downtrend. Currently, price action is confined within a descending wedge, where the market is attempting a modest relief bounce from the 72.99 support area.

Momentum indicators remain cautious. The RSI has risen from oversold territory to around 43.97, signaling a minor recovery, but it remains below the neutral 50 line, keeping the technical bias bearish. Price is also trapped under immediate horizontal resistance at 79.52. Failing to reclaim this level would likely pave the way for a continuation of leg (c) down toward a high-confluence support zone between 54.52 and 60.00, where the long-term black ascending trendline intersects key historical floors.

On the upside, a high-volume breakout above the descending wedge’s diagonal resistance would help neutralize the near-term bearish structure and could open the path for a retest of the 96.30 level. However, the current gap between price and the broader trendline still suggests the market may need more time to form a solid bottom before any sustained recovery takes hold.

A key level to watch on the upside is 92.00. If price fails to close above this level, downside pressure is likely to persist, keeping the bearish leg (c) scenario in play with potential extension toward the 52.00 area.

On the other hand, a confirmed close above 92.00 would invalidate the leg (c) structure, signaling that the downtrend is losing control and that a stronger recovery phase could be underway, the focus remains on 79.52 resistance and the 54–60 support zone, as these levels are likely to define the next decisive move.

Source: Trading view