I. Price Action & Technical Analysis
China main continuous contract closed at CNY 15,661/kg on 2026-09-24, down 3.24% on the day, the largest single-day decline in the past five trading sessions; previously 09-23 closed at 16,165 (+0.26%), 09-22 at 15,949 (-1.83%), 09-21 at 16,140 (+0.22%), and 09-18 at 16,304 (+4.07%). The 4%-level rebound on 09-18 clearly failed to extend, and the single bearish candle on 09-24 has essentially given back the prior two sessions' gains.
Moving average structure is turning weaker: on 09-24, MA5 stood at 16,043.8 and MA20 at 16,032.3; the close of 15,661 broke below both averages, and MA5 (16,043.8) is now slightly above MA20 (16,032.3), with the short MA flattening and showing early signs of turning down. If MA5 subsequently crosses below MA20, a short-term bearish alignment will be confirmed. On a medium-term view, the 20-day high of 17,388 and the 20-day low of 15,285 define a wide range of roughly CNY 2,103; the current price sits about one quarter above the lower bound, approximately 9.9% below the high and only about 2.5% above the low, i.e. positioned toward the lower end of the range.
Pivot and key levels: on 09-24, pivot P is 15,747, R1 is 15,914, S1 is 15,494; the close of 15,661 sits below P but above S1, within the weak zone beneath the pivot. On 09-23, P was 16,189, R1 16,376, S1 15,978; by comparison, the pivot has shifted down by about CNY 442 over two sessions, indicating a clear lowering of the price center of gravity.
However, given two consecutive down days with the 09-24 decline widening, short-horizon momentum is skewed bearish. On volatility, ^VXSLV closed at 35.99 (09-25, 0%), elevated and stagnating, suggesting the options market is still pricing a high degree of tail risk in silver.
Key levels: upside resistance lies, in sequence, at the MA20/MA5 cluster of 16,032.3–16,043.8, pivot P 15,747, and R1 15,914; downside support is at S1 15,494 and the 20-day low of 15,285. A close firmly above 16,043.8 would signal short-term repair of the weak tone; a loss of 15,285 would break the range floor and open up further downside.
II. Fundamental Drivers
Macro rates and the US dollar are the core variables currently weighing on precious metals. On 2026-09-25, the US 10-year Treasury yield ^TNX stood at 5.184, up 0.43%, at elevated levels; the dollar index DX-Y.NYB was 101.04, down 0.25%. High nominal rates imply a relatively high opportunity cost of holding non-yielding silver, exerting systemic pressure on prices; the dollar's modest pullback on the day provided only a marginal buffer and is insufficient to reverse the trend.
Inferring from the 5.18% 10-year nominal yield, if inflation expectations do not rise in tandem, real rates remain tight, which is the primary reason silver's financial attributes are under pressure.
On inventories, SHFE Silver warrants stood at 1,443,896 kg on 2026-09-24, with a weekly change of +1,753 kg; 09-23 was 1,442,143 kg, weekly change +4,494 kg; 09-22 was 1,437,649 kg, weekly change +14,333 kg. Inventories have built for three consecutive sessions, but the weekly change has narrowed from +14,333 kg to +1,753 kg, indicating a slower pace of accumulation. Overall, the absolute inventory level is not low, but marginal build pressure is easing, which is neutral to slightly bearish for prices.
Note that silver's monetary attributes are weaker than gold's; central-bank gold buying has limited direct transmission to silver prices and is reflected mainly through the gold-silver ratio.
On the term structure, the international curve is in CONTANGO, with M1-M2 at -0.11 (-0.17%), roll yield RY at -2.07%, and slope at 0.2603. The structure of near-month discount and far-month premium reflects relatively ample nearby supply, which is unfavorable for a short-squeeze-style rally, but the slope is mild and does not yet signal deep oversupply.
III. Positioning & Fund Flows
China positioning: on 09-24, open interest (OI) was 246,698 lots, up 10,078 lots from 236,620 lots on 09-23, and continuing to climb from 231,506 lots on 09-22, 224,932 lots on 09-21, and 215,014 lots on 09-18. Prices fell while open interest rose—an open interest build on declining prices—indicating active short entry or passive long additions to average down, with short-term fund flows skewed bearish.
International COT (as of 2026-09-15): total OI was 103,745 lots, longs L at 20,205 lots, shorts S at 7,081 lots, net long at 13,124 lots, with a weekly change Δ of -1,262 lots. Looking back: 09-08 net long 14,386 (Δ+1,788), 09-01 net long 12,598 (Δ-1,475), 08-25 net long 14,073 (Δ+2,378). Net longs have oscillated within the 12,598–14,386 range; the latest week saw a reduction of 1,262 lots, a mild long trim with no signs of panic liquidation.
Crowding indicators (2026-09-15): net long share netPct was 12.65%, crowding crowd at 55.04, CTA at 62, and hedge share at 25.81%. By comparison, 09-08 showed netPct 13.93% and crowd 58.85; 09-01 showed 12.07% and crowd 53.27; 08-25 showed 12.37% and crowd 54.54. Net long share and crowding have retreated from the 09-08 peak, easing long-side congestion; this reduces the risk of a sharp long-squeeze-driven drop but also signals insufficient upward momentum.
Options and volatility: ^VXSLV closed at 35.99 (09-25, 0%), flat at elevated levels; ^VIX closed at 14.87 (09-25, -5.11%). Equity volatility fell while silver volatility did not, and the divergence shows silver's own risk premium is independently high, with strong demand for downside protection in the options market.
IV. Cross-Asset Relative Value
The gold-silver ratio GC_SI_RATIO stands at 67.72, in the 63.89th percentile over one year and the 21.3rd percentile over three years. Interpretation: relative to the past year, the ratio is elevated (gold has outperformed silver), implying silver is undervalued on a one-year horizon; relative to the past three years, the ratio sits in a lower percentile, meaning silver is not cheap on a three-year view. The divergence between the two percentile readings indicates silver's valuation versus gold is in a neutral zone, lacking a strong driver for extreme mean reversion. If the ratio reverts toward its one-year median (downward), silver has room to catch up versus gold; if it reverts toward its three-year center (upward), silver still faces relative downside pressure.
For reference, silver carries both precious- and industrial-metal attributes; in an environment of 5.18% Treasury yields, any weakening in industrial demand expectations would amplify its decline relative to gold.
Risk metrics: DD52w at 51.43%, DD20d at 6.93%, Sharpe30 at -0.3314, VaR95 at -6.28%, Vol20 at 31.16%. A 52-week maximum drawdown above 51% shows silver is in a state of long-term high volatility and deep drawdown; the 20-day drawdown of 6.93% is mild in the short term; the 30-day Sharpe is negative, indicating poor risk-adjusted returns; 20-day annualized volatility of 31.16% marks it as a high-volatility instrument, and position sizing should be scaled back accordingly.
V. Sentiment
Available sentiment proxies: ^VXSLV at 35.99, flat at elevated levels, reflects a cautious options market; COT crowding at 55.04, down from 58.85 the prior week, shows speculative sentiment cooling; China's open interest build on falling prices indicates bearish fund sentiment. Taken together, current sentiment sits in a neutral-to-bearish zone, with no extreme panic readings, meaning a typical contrarian long signal has not yet appeared.
VI. Historical Statistics
Alternative reference metrics: DD52w of 51.43% shows silver has undergone a deep drawdown over the past year; historically, recoveries from deep drawdowns tend to be accompanied by high volatility. Vol20 of 31.16% indicates current volatility is in the upper range; in high-volatility regimes, mean reversion typically proceeds faster than trend continuation. Late September to early October is the window for China's manufacturing PMI release (2026-09-29 21:30 CNY/HIGH Manufacturing PMI); historically, this data has disturbed short-cycle sentiment for industrially-linked commodities, but given the lack of localized statistical samples, no directional inference is made.
VII. Long–Short Scenario Analysis
Bullish case: First, price has approached the 20-day low of 15285, only about 2.5% above that support, leaving relatively limited downside; second, SHFE warehouse warrants weekly change narrowed from +14,333 kg to +1,753 kg, indicating a marginal easing of inventory build pressure; third, COT net-long share and crowding have retreated from the 09-08 peak, releasing long-crowding risk and allowing a cleaner slate; fourth, the gold-silver ratio's 1-year percentile stands at 63.89%, on the high side, suggesting silver may catch up versus gold; fifth, the dollar index fell 0.25% on the day to 101.04, and if the decline extends, the headwind would ease.
Bearish case: First, on 09-24 price fell 3.24% in a single session and broke below MA5 and MA20, weakening the technical picture; second, China open interest rose from 215,014 lots to 246,698 lots, and the open interest build on a down move signals short dominance; third, the 10-year UST yield at 5.18% remains elevated, with real rates pressuring non-yielding assets; fourth, the term structure is in CONTANGO with RY at -2.07%, and ample spot supply is unfavorable for upside; fifth, ^VXSLV at 35.99 remains high and unabated, reflecting strong demand for downside protection and market pricing of further declines.
Short- vs medium-term balance: Short term (1–5 days) bears have the edge, with price below pivot P 15747 and rebounds facing dual resistance at MA20 16032.3 and R1 15914; medium term (1–3 months) the balance is neutral-to-bearish, requiring observation of whether the 15285 support holds and whether UST yields have peaked. A break below 15285 would strengthen bearish momentum; a firm hold above 16043.8 would trigger a long-side repair.
VIII. Trading Strategies & Risk Management
Strategy 1 (sell into rebounds, primary): entry reference 15900–15950 (near R1 15914), stop-loss 16100 (above MA20 16032.3), target 15494 (S1), horizon 1–5 days, position size no more than 15% of total capital, conviction 7. Logic: rebound meets resistance within a weak zone below the pivot.
Strategy 2 (oversold light long, secondary): entry reference 15300–15350 (above the 20-day low of 15285), stop-loss 15150 (below the 20-day low), target 15747 (pivot P), horizon 1–5 days, position size no more than 8% of total capital, conviction 5. Logic: support at the lower edge of the range combined with slowing inventory accumulation.
Risk management: Vol20 at 31.16% and VaR95 at -6.28%; single-trade exposure must be scaled by volatility, with recommended maximum loss per trade no more than 1.5% of total capital; if price closes firmly above 16043.8, exit the short strategy with a stop; if it closes below 15285, exit the long strategy with a stop. The two strategies must not be fully deployed simultaneously; one must be chosen as primary.
IX. This Week's Data Calendar
China financial calendar for the next 7 days: 2026-09-29 21:30 (CNY/HIGH) Manufacturing PMI. Watch the breakout direction of SHFE Silver main contract within the 15285–16043.8 range around the PMI release, as well as the linkage with UST yields and the dollar index.
This report is generated automatically from public quantitative and macro data for research and market tracking only. It does not constitute any investment advice.