Silver's Liquidity Squeeze Meets a 70-Dollar Bet Nobody Can Confirm Yet
Published on 10/25/2026 at 11:02 | Editorial boerse-global.de
Silver bulls have a fresh set of price targets to argue about, but the metal's own trading tape is doing most of the talking right now. COMEX front-month silver settled Friday at USD 53.96 per fine ounce — a level that sits above the key support Florian Grummes flagged, yet still marks a 5.6% weekly loss that lays bare how hard short-term forces are leaning against the longer-term recovery case.
Two Kinds of Selling, One Price
The downdraft is not purely a verdict on silver's fundamentals. According to media reports, weakness in US technology and AI equities forced investors to meet margin calls, and those obligations translated into additional silver sales. That kind of selling tracks liquidity needs elsewhere in a portfolio rather than any reassessment of the metal itself.
Energy markets piled on. Huthi attacks on Saudi Arabia and risks to shipping through the Strait of Hormuz pushed oil higher, sharpening inflation worries and reinforcing expectations of a longer stretch of restrictive US monetary policy. Grummes, for his part, read both the daily and weekly charts as bearish as of Friday, even with the front-month contract closing above his highlighted support. He characterized the ongoing weakness as a correction and pointed to USD 50 as the critical floor.
Inventories Tell a Divided Story
Anyone hoping warehouse data would settle the argument will be disappointed. China's social silver stocks, tracked by SMM, fell 25 tonnes to 3,909 tonnes between October 8 and October 15, and SGE silver warrants declined over the same window. The latest SHFE figure, however, demands caution: because of an intervening exchange closure, the comparison was drawn against September 30, so no clean week-on-week change can be derived from it.
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Stockpiles outside China diverge just as sharply. WisdomTree reported Thursday that COMEX silver inventories had come off the elevated levels seen in 2025, while holdings in London vaults climbed. The takeaway for investors is to separate movements at individual locations from any broad-based squeeze.
The Demand Picture Refuses to Cooperate
WisdomTree also flagged weaker solar demand, material thrift and substitution as demand-side risks, with electrification and AI infrastructure offering only partial offsets. The Silver Institute projects industrial silver demand falling roughly 2% in 2026, dragged down chiefly by thrift in photovoltaic silver usage. Precious metals dealer philoro noted Wednesday that silver, given its industrial footprint, is more economy-sensitive than gold — meaning swings in both industrial and investor demand can hit the price at once.
UBS Global Wealth Management is looking past the aggregate number to shifts within it. Data centers, AI hardware, power grids and automotive electronics are expected to absorb part of the solar savings, which makes the interplay between applications more important than any single end market. The bank also expects 2026 to deliver the sixth consecutive annual global supply deficit — a structural prop, though one that plainly does not rule out interim selloffs, as the latest rout demonstrates.
Where the Targets Come From
UBS's roadmap puts silver at USD 70 per fine ounce by December this year, USD 75 by mid-next year and USD 80 by September next year. Those figures rest on a medium-term view, not a confirmed turn. The bank lists higher-for-longer rates, a deeper global slowdown and faster industrial substitution among the risks, with a firm dollar as an additional headwind.
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Media reports likewise point to a possible sixth straight supply shortfall in 2026 as a supporting factor — but that remains an expectation, and an annual balance sheet does not answer the question of where prices go next week.
What investors are left with is a standoff between forced short-term selling and longer-run physical tightness. Falling inventories can cushion silver, yet on their own they offer no durable evidence of a trend reversal against demand risks, liquidation pressure and a chart that still points down. The UBS forecast gains credibility only if new applications genuinely offset the solar thrift; higher financing costs and softer industrial activity could just as easily delay that offset.
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