I. Price Action & Technical Analysis
China's main continuous contract closed at 15,661 CNY/kg on 2026-09-24, down 3.24% on the day, the largest single-day decline in the past 5 trading sessions; previously 09-23 closed at 16,165 (+0.26%), 09-22 closed at 15,949 (-1.83%), 09-21 closed at 16,140 (+0.22%), and 09-18 closed at 16,304 (+4.07%). It is evident that the 4%-magnitude rebound on 09-18 failed to extend, and a single bearish candle on 09-24 essentially retraced the gains of the prior two days.
The moving-average structure has weakened: on 09-24, MA5 stood at 16,043.8 and MA20 at 16,032.3, with the close at 15,661 breaking below both moving averages simultaneously, and MA5 (16,043.8) already slightly above MA20 (16,032.3), with the short-term moving average flattening and showing signs of turning downward; should MA5 subsequently cross below MA20, a short-term bearish alignment would be confirmed. On a medium-term view, the 20-day high of 17,388 and the 20-day low of 15,285 form a wide box of approximately 2,103 CNY, with the current price positioned at roughly one-quarter from the lower edge of the box, about 9.9% retraced from the high and only about 2.5% above the low, placing it toward the lower edge.
Pivots and key levels: the 09-24 pivot P was 15,747, R1 was 15,914, and S1 was 15,494; the close at 15,661 sits below P and above S1, in a weak zone beneath the pivot. On 09-23, P was 16,189, R1 was 16,376, and S1 was 15,978; by comparison, the pivot has shifted down by approximately 442 CNY over two days, a clear downward migration of the center of gravity.
However, judging from two consecutive days of declines with the drop widening on 09-24, short-cycle momentum is bearish. On the volatility front, ^VXSLV closed at 35.99 (09-25, 0%), flat at an elevated level, indicating that the options market continues to price high tail risk for silver.
Key levels in summary: upside resistance is, in order, the MA20/MA5 congestion zone at 16,032.3—16,043.8, the pivot P at 15,747, and R1 at 15,914; downside support is S1 at 15,494 and the 20-day low at 15,285. If the close holds above 16,043.8, the short-term weakness would be repaired; if 15,285 is breached, the box would break down and downside space would open up.
II. Fundamental Drivers
Macro rates and the dollar are the core variables currently weighing on precious metals. On 2026-09-25, the 10-year U.S. Treasury yield ^TNX printed 5.184, up 0.43%, at an elevated level; the dollar index DX-Y.NYB printed 101.04, down 0.25%. Elevated nominal rates imply a high opportunity cost of holding non-yielding silver, constituting a systemic drag on silver prices; the modest intraday pullback in the dollar provides only a marginal buffer and is not yet sufficient to reverse the trend.
However, inferring from the 5.18% 10-year nominal rate, if inflation expectations have not risen in tandem, real rates remain tight, which is the primary reason for the pressure on silver's financial attribute.
On inventories, SHFE silver warrants stood at 1,443,896 kg on 2026-09-24, a weekly change of +1,753 kg; 1,442,143 kg on 09-23, a weekly change of +4,494 kg; and 1,437,649 kg on 09-22, a weekly change of +14,333 kg. Inventories accumulated for three consecutive days, but the weekly change narrowed from +14,333 kg to +1,753 kg, indicating a slowing pace of accumulation. Overall, the absolute inventory level is not low, but the marginal accumulation pressure has diminished, a slightly bearish-to-neutral signal for prices.
Note that silver's monetary attribute is weaker than gold's, and central bank gold purchases transmit only limitedly and directly to silver prices, manifesting more indirectly through the gold-silver ratio.
On the term structure, the international market is in CONTANGO, with M1-M2 at -0.11 (-0.17%), rolling yield RY at -2.07%, and slope at 0.2603. The structure of near-month discount and far-month premium reflects relatively ample immediate physical supply, which is not conducive to a squeeze-driven rally, but the slope is mild and does not yet constitute a signal of deep excess.
III. Positioning & Fund Flows
China positioning: OI on 09-24 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. Falling prices alongside rising open interest constitute a decline on open interest build, indicating active short entry or passive long averaging-down; short-term fund flows are bearish.
International COT (as of 2026-09-15): total open interest OI was 103,745 lots, longs L at 20,205 lots, shorts S at 7,081 lots, net long net at 13,124 lots, with a weekly change Δ of -1,262 lots. Backward look: 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 long has oscillated in the 12,598—14,386 range, declining by 1,262 lots in the latest week, a modest reduction in longs with no panic liquidation observed.
Crowding metrics (2026-09-15): net long share netPct at 12.65%, crowding crowd at 55.04, CTA at 62, hedge at 25.81%. Compared with 09-08's netPct 13.93% and crowd 58.85, 09-01's 12.07% and crowd 53.27, and 08-25's 12.37% and crowd 54.54. Net long share and crowding have retreated from the 09-08 high, easing long crowding, which means the risk of a sharp selloff from long capitulation has declined, but it also indicates insufficient upside momentum.
Options and volatility: ^VXSLV closed at 35.99 (09-25, 0%), flat at an elevated level; ^VIX closed at 14.87 (09-25, -5.11%), with equity volatility retreating while silver volatility does not decline; the divergence between the two shows that silver's own risk premium is independently elevated, and options market demand for downside protection is robust.
IV. Cross-Asset Relative Value
The gold-silver ratio GC_SI_RATIO is 67.72, at the 63.89% 1-year percentile and the 21.3% 3-year percentile. Interpretation: relative to the past year, the gold-silver ratio is elevated (gold is relatively stronger than silver), and silver is undervalued on a 1-year horizon; relative to the past three years, the gold-silver ratio is at a low percentile, and silver is not cheap on a 3-year horizon. The divergence between the two percentile measures indicates that silver's valuation relative to gold sits in a neutral range, lacking a strong driver for extreme-value reversion. If the gold-silver ratio reverts toward the 1-year median (downward), silver has room to catch up relative to gold; if it reverts toward the 3-year center (upward), silver still faces relative weakness versus gold.
For reference, silver carries both precious-metal and industrial-metal attributes; in an environment of 10-year U.S. Treasury yields at 5.18%, 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 exceeding 51% indicates silver is in a prolonged state of high volatility and deep drawdown; the 20-day drawdown of 6.93% is a modest short-term retracement; the 30-day Sharpe is negative, reflecting poor risk-adjusted returns; the 20-day annualized volatility of 31.16% marks it as a high-volatility instrument, requiring correspondingly reduced position sizing.
V. Sentiment
The available sentiment proxies are: ^VXSLV flat at an elevated 35.99, reflecting cautious options market sentiment; COT crowding at 55.04, down from 58.85 the prior week, indicating cooling speculative sentiment; and China's decline on open interest build, reflecting bearish fund sentiment. On balance, the current sentiment score sits in a neutral-to-bearish range, lacking extreme panic readings, which means a typical contrarian long signal has not yet appeared.
VI. Historical Statistics
A reference alternative measure: DD52w of 51.43% shows silver has experienced a deep drawdown over the past year, and historically recoveries after deep drawdowns tend to be accompanied by high volatility; Vol20 of 31.16% shows current volatility is in an elevated range, and in high-volatility environments the pace of mean reversion is typically faster than trend continuation. Late September to early October is the release window for China's manufacturing PMI (2026-09-29 21:30 CNY/HIGH Manufacturing PMI); historically this data point has disturbed short-cycle sentiment for industrial-attribute instruments, but given the lack of localized statistical samples, no directional inference is made.
VII. Long-Short Game Simulation
Bullish arguments: First, the price has approached the 20-day low of 15285, only about 2.5% away from this support, leaving relatively limited downside room; second, the weekly change in SHFE warrants narrowed from +14333 kg to +1753 kg, indicating that inventory build pressure is weakening at the margin; third, the COT net-long ratio and crowding have retreated from the 09-08 high, releasing long-crowding risk and favoring a lighter positioning stance; fourth, the 1-year percentile of the gold-silver ratio at 63.89% is elevated, suggesting silver may have room to catch up relative to gold; fifth, the US dollar index fell 0.25% on the day to 101.04, and if this continues it would ease pressure.
Bearish arguments: First, the 09-24 single-day decline of 3.24% broke below both MA5 and MA20, weakening the technical setup; second, China open interest rose from 215014 lots to 246698 lots, with the decline accompanied by open interest build indicating bearish dominance; third, the US 10-year Treasury yield at a high of 5.18% means real rates are suppressing non-yielding assets; fourth, the term structure is in CONTANGO with RY at -2.07%, and loose spot conditions are unfavorable for upside; fifth, ^VXSLV at a high of 35.99 has not declined, reflecting strong demand for downside protection as the market prices in further declines.
Short- to medium-term balance of power: In the short term (1-5 days), bears hold the advantage, with the price below the pivot P at 15747, and rebounds facing dual resistance from MA20 at 16032.3 and R1 at 15914; in the medium term (1-3 months), the balance is neutral-to-bearish, and it is necessary to watch the validity of the 15285 support and whether US Treasury yields have peaked. If 15285 is breached, bearish momentum would strengthen; if the price holds above 16043.8, a bullish repair would begin.
VIII. Trading Strategies & Risk Management
Strategy One (sell into rebounds, primary strategy): Entry reference 15900-15950 (near R1 at 15914), stop-loss 16100 (above MA20 at 16032.3), target 15494 (S1), horizon 1-5 days, position size no more than 15% of total capital, conviction 7. The logic is that rebounds meet resistance within the weak zone below the pivot.
Strategy Two (light long on oversold conditions, secondary strategy): Entry reference 15300-15350 (above the 20-day low of 15285), stop-loss 15150 (break below the 20-day low), target 15747 (pivot P), horizon 1-5 days, position size no more than 8% of total capital, conviction 5. The logic is support at the lower edge of the range combined with slowing inventory build.
Risk management: With Vol20 at 31.16% and VaR95 at -6.28%, single-trade risk exposure must be scaled by volatility, and it is recommended that the maximum loss per trade not exceed 1.5% of total capital; if the price closes and holds above 16043.8, the short strategy should be stopped out; if the close breaks below 15285, the long strategy should be stopped out. The two strategies must not both be held at full size, and one must be chosen as the primary.
IX. Week Ahead Calendar
China economic calendar for the next 7 days: 2026-09-29 21:30 (CNY/HIGH) Manufacturing PMI. It is recommended to watch the direction of the SHFE Silver main contract's breakout within the 15285-16043.8 range around the PMI release, as well as the linkage between US Treasury yields and the US 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.