Silver's break below $62/oz marks a decisive shift in market sentiment. The 14-day Relative Strength Index (RSI) dropped to 29.4, entering oversold territory for the first time since March. Technical analysts see the next support level at $58–$60.
COMEX managed money accounts reduced net long positions by 22% last week, now holding 12,500 contracts net long, the lowest since February. The liquidation has been driven by margin calls and a shift toward dollar-based assets.
COMEX silver inventories edged up to 296 million ounces, suggesting physical metal continues to flow into exchange warehouses, which can signal that demand from industrial users is not absorbing available supply at current prices.
On the supply side, mined output is projected to grow 3.2% in 2026, led by new production from Mexico and Peru. However, secondary supply (recycling) has declined as lower prices discourage scrap collection.
The silver market faces a structural deficit estimated at 45 million ounces for 2026, driven by industrial demand growth, particularly from solar manufacturing and the electronics sector.
Oversold RSI readings suggest a short-term bounce is likely. Industrial buyers should use the $58–$62 zone to layer in hedges for H2 2026 requirements. The structural deficit supports prices above $55 even in a bearish macro scenario.