BlockBeats news, on October 22, Goldman Sachs commodity strategist Robert Quinn described the silver market as "Still Stuck" in his latest report. Over the past three weeks, managed funds have cumulatively net sold approximately $2.2 billion in silver futures, reducing their net long positions to the lowest level in Goldman Sachs' two-year data set. Meanwhile, the three-month silver put/call option skew rose to the 98th percentile of its one-year range, indicating a significant increase in market risk-off sentiment.
Silver is facing dual pressures from the dollar and industrial demand. Between October 13 and 20, while the U.S. dollar index fell 0.5%, silver declined 2.6%. During the same period, U.S. solar stocks dropped 4.7%, Chinese solar stocks fell 1.6%, and data center-related stocks plummeted 7.9% amid concerns over memory, new cloud computing, and credit risk, dampening market expectations for industrial demand for silver.
Quinn noted that risk-off sentiment triggered by the sell-off in the AI sector could weigh on the dollar, but a deterioration in AI investment prospects would undermine the industrial demand rationale for silver, creating a reinforcing negative feedback loop. Although highly crowded short positions may present a tactical rebound opportunity for silver, the situation in Iran and its impact on oil prices and the dollar remain key headwinds. Goldman Sachs believes that a de-escalation in the Strait of Hormuz or worsening AI credit risk prompting markets to lower interest rate hike expectations could serve as key catalysts to break the current stalemate for silver.