I. Price Action & Technical Analysis
SHFE Silver main continuous closed at 15,661 CNY on September 24, down 3.24% on the day, the largest single-day decline in the past 5 trading sessions; it previously closed at 16,165 CNY on September 23, up 0.26%; at 15,949 CNY on September 22, down 1.83%; at 16,140 CNY on September 21, up 0.22%; and at 16,304 CNY on September 18, up 4.07%. Using the September 18 close of 16,304 CNY as the baseline, the cumulative pullback over 5 trading sessions is approximately 3.94%; measured from the September 23 close of 16,165 CNY, the most recent trading session posted a single-day decline of 3.24%.
The moving-average structure has weakened: on September 24, MA5 stood at 16,043.8 CNY and MA20 at 16,032.3 CNY, with the close of 15,661 CNY breaking below both averages simultaneously, and MA5 having already crossed below MA20, forming the early shape of a bearish alignment across short- and medium-term averages. The 20-day high is 17,388 CNY and the 20-day low is 15,285 CNY; the current close sits approximately 2.46% above the lower bound of the 20-day range, placing it in the lower portion of the range; it is about 9.93% below the 20-day high and about 2.46% above the 20-day low.
Pivot and key levels: the September 24 pivot P is 15,747 CNY, first resistance R1 is 15,914 CNY, and first support S1 is 15,494 CNY. The close of 15,661 CNY sits 86 CNY below P and 167 CNY above S1, with price hugging S1, putting the short term in a weak zone below the pivot. ATR14 is 489.57 CNY; measured on that volatility scale, the close is about 0.34x ATR14 from S1 and about 0.52x ATR14 from R1, indicating a relatively compressed intraday range.
Structurally, following the high-volume long bullish candle on September 18 (up 4.07%, volume 165,934 lots), price declined for three consecutive trading sessions; on September 24 volume expanded to 208,171 lots and open interest rose to 246,698 lots, a pattern of declining price on rising volume with open interest build, indicating that shorts actively added positions rather than longs dominating the liquidation. If price holds above S1 (15,494 CNY) and reclaims P (15,747 CNY), a short-term rebound toward R1 (15,914 CNY) is likely; if S1 is decisively broken, the downside will directly test the 20-day low of 15,285 CNY.
II. Fundamental Drivers
The macro rates side remains the core variable weighing on silver valuation. The U.S. 10-year Treasury yield (^TNX) is at 5.18%, up 0.43% from the prior reading, in a high range; the U.S. Dollar Index (DX-Y.NYB) is at 100.97, down 0.32% on the day. High nominal rates raise the opportunity cost of holding a non-yielding asset, pressuring silver valuation; the one-day softening of the dollar marginally eases the intensity of that pressure. If Treasury yields subsequently hold above 5% while the dollar continues to retreat, silver's downside pressure may be partially offset; if yields rise further and the dollar rebounds, silver's pressure intensifies.
The inventory side shows divergence between domestic and international markets. SHFE silver inventory (warrant) was 1,443,896 kg on September 24, a weekly increase of 1,753 kg; on September 23 it was 1,442,143 kg, a weekly increase of 4,494 kg, logging consecutive weekly net builds on two days, with the accumulation of China's visible inventory pressuring near-month SHFE Silver. COMEX registered inventory was 2,994,645 kg on September 24 and 3,005,531.2 kg on September 23, a modest combined drawdown of about 10,886.2 kg over the two days, marginally tightening international inventory. The opposing directions of domestic and international inventories mean that the momentum for SHFE Silver to repair its premium relative to the international market is limited, and the cross-market arbitrage window leans toward pressuring the Chinese market.
On term structure, the international market is in CONTANGO, with M1-M2 at -0.27 (-0.42%), far-month annualized premium RY at -5.02%, and slope at 0.2948; the near-month discount structure reflects that the spot side is not tight, consistent with the judgment that the COMEX inventory drawdown is limited in magnitude.
On the geopolitical and risk-appetite front, the CBOE Volatility Index (^VIX) was 14.87 on September 25, down 5.11%, at a low level, with risk appetite broadly stable; the CBOE Silver Volatility Index (^VXSLV) was 35.99, unchanged, with silver's own volatility remaining elevated, indicating that the market's directional disagreement on silver remains wide. Risk indicators show a 52-week maximum drawdown of 51.43%, a 20-day maximum drawdown of 6.98%, a 30-day Sharpe of 0.1443, VaR95 of -6.28%, and 20-day annualized volatility of 33.27%; silver's risk-reward ratio has been weak over the past month.
III. Positioning & Fund Flows
COT positioning (international market comparison) shows total open interest of 106,474 lots on September 22, with longs at 19,303 lots and shorts at 5,994 lots, for a net long of 13,309 lots, an increase of 185 lots from the prior week. Looking back four weeks: net long of 13,124 lots on September 15 (Δ-1,262), net long of 14,386 lots on September 8 (Δ+1,788), and net long of 12,598 lots on September 1 (Δ-1,475). Net long positioning peaked on September 8 and declined for two consecutive weeks, then edged up on September 22, overall sitting in a neutral-to-elevated range above 130,000 lots, with no trend-level exodus by longs.
On crowding, netPct was 12.5% on September 22, crowd was 55.01, CTA positioning was 62, and hedge share was 24.99%. Comparing with netPct 12.65% and crowd 55.04 on September 15, netPct 13.93% and crowd 58.85 on September 8, and netPct 12.07% and crowd 53.27 on September 1, it is evident that since September 8 crowding has fallen from 58.85 to 55.01, releasing some long crowding pressure, but CTA positioning has held steady at 62, meaning trend-following capital has not yet turned.
Chinese market fund flows diverge from price: on September 24, SHFE Silver volume was 208,171 lots and open interest 246,698 lots, both expanding from 180,102 lots and 236,620 lots on September 23, a pattern of falling price with rising open interest, clearly indicating active entry by short capital. On the options and volatility dimension, ^VXSLV was 35.99, unchanged, with implied volatility remaining elevated; the options market's pricing of downside risk has not risen significantly, creating some divergence from the short build on the futures side. If open interest continues to increase while price stabilizes, short covering could trigger a rebound; if rising open interest is accompanied by continued price declines, the trend-level downtrend continues.
IV. Cross-Asset Relative Value
The gold-silver ratio (GC_SI_RATIO) is at 66.68, in the 54.37% percentile over 1 year and the 18.12% percentile over 3 years. The 3-year percentile of just 18.12% means the current silver-to-gold ratio sits at a low level relative to the past three years, i.e., silver has clearly underperformed gold. Under mean-reversion logic, a low percentile favors the numerator (silver), and if the ratio reverts toward the three-year center, silver has room to catch up relative to gold; under momentum logic, the ratio is in a downtrend, and silver's relative weakness may persist, requiring a stabilization signal in the ratio for confirmation.
In absolute terms, the gold-silver ratio of 66.68 is below the vicinity of the 1-year median but significantly below the 3-year center, indicating that gold's strength over the past year has been partly caught up to by silver, while on a three-year basis silver still lags substantially. The implication of this structure for SHFE Silver is: if gold holds in a high-level range, silver's downside is relatively limited; if gold corrects, silver may show some resilience given the low ratio.
Risk indicators provide another cross-asset reference: silver's 20-day annualized volatility of 33.27% is significantly higher than the equity-market volatility level reflected by ^VIX over the same period (14.87), and silver's risk premium is elevated in cross-asset comparison, so the cost-effectiveness of capital allocation must be measured on a volatility-adjusted basis. VaR95 of -6.28% means that at a 95% confidence level, the potential single-day loss approaches 6.28%, and position management must use this as a constraint.
Taken together, the low percentile of the gold-silver ratio is currently the most supportive cross-asset signal for SHFE Silver, but that signal belongs to medium-term mean-reversion logic and still requires price and positioning structure to align in the short term. If the gold-silver ratio stabilizes and rebounds from 66.68, a catch-up rally in silver relative to gold may begin; if the ratio continues to probe lower, silver's relative weakness persists and the upside for a SHFE Silver rebound is limited.
V. Sentiment
On the sentiment sub-dimensions, ^VIX was 14.87, down 5.11%, at a low level, with equity-market sentiment stable to mildly optimistic; ^VXSLV was 35.99, unchanged, with silver-specific volatility remaining elevated, reflecting wide sentiment divergence and insufficient directional consensus in the silver market. The divergence between the two indicates that macro risk appetite has not deteriorated, and silver's high volatility stems more from its own supply-demand and positioning structure.
Over the past 48 hours, China-related silver headlines show no significant directional bias, with Chinese sentiment in a neutral state and lacking a clear directional catalyst. Against this backdrop, price is driven more by international market linkage and changes in Chinese inventories. If marginal changes in inventories or policy emerge in China subsequently, sentiment could price them quickly; at the current stage, sentiment has limited explanatory power for price, and positioning and ratio signals should take precedence.
VI. Historical Statistical Patterns
Use historical percentiles to locate the current price: the gold-silver ratio at 66.68 sits at the 54.37% percentile on a 1-year basis and the 18.12% percentile on a 3-year basis — neutral on the 1-year dimension but significantly low on the 3-year dimension, indicating that silver's relative valuation versus gold is in a low zone over the long cycle, with mean-reversion odds skewed in favor of silver.
Locate within the 1-year range: SHFE Silver's 20-day high is 17388 CNY and the 20-day low is 15285 CNY; the current close of 15661 CNY sits approximately 2.46% above the lower bound of that range, placing it in a low position within the range. Risk metrics show a 52-week maximum drawdown of 51.43%, indicating that silver has experienced a deep drawdown over the past year; the current price remains far from the 52-week high, so medium-term recovery potential exists but will take time.
Locate via spread Z-score: the COT net-long ratio netPct of 12.5% corresponds to a crowding score of 55.01, placing it in a neutral-to-elevated range and below the extreme crowding threshold; CTA positioning at 62 has remained unchanged for four consecutive weeks, indicating a stable stance among trend-following funds. The combination of a 20-day maximum drawdown of 6.98% and a 20-day annualized volatility of 33.27% indicates the current phase is one of high volatility and moderate drawdown; historically, such combinations tend to correspond to range-bound bottoming rather than one-directional trends. If the price stabilizes above the 20-day low of 15285 CNY, statistics favor range repair; if it breaks below that level, the drawdown could extend toward the 52-week extreme.
VII. Bull-Bear Game Theory
Bullish logic: First, the gold-silver ratio at 66.68 sits at the 18.12% percentile on a 3-year basis, with silver deeply underperforming gold, and the mean-reversion direction favors silver; second, COT net-longs at 13309 contracts increased by 185 contracts versus the prior week, longs have not retreated, and crowding fell from 58.85 to 55.01, releasing crowding pressure; third, COMEX registered inventory destocked by approximately 10886.2 kg over two days, marginally tightening international physical supply; fourth, the dollar index fell 0.32% to 100.97, marginally easing valuation pressure; fifth, the close at 15661 CNY sits above S1 (15494 CNY), the 20-day low of 15285 CNY has not been breached, and technical support remains intact.
Bearish logic: First, the close lost MA5 (16043.8 CNY) and MA20 (16032.3 CNY), turning the moving averages bearish; second, SHFE inventory rose 1753 kg week-on-week, accumulating China's visible inventory; third, the 10-year U.S. Treasury yield is running at a high of 5.18%, keeping holding costs elevated; fourth, on September 24, price fell while open interest rose, indicating active short entry; fifth, the international market SI=F fell 5.91% over 20 days, with international market weakness dragging on the China market.
Short- versus medium-term balance of power: In the short term (1-5 days), bears hold the advantage, with price hugging S1 and clear moving-average resistance; in the medium term (1-3 months), the bullish logic is more complete, supported by the low percentile of the gold-silver ratio and international inventory destocking. If S1 (15494 CNY) holds, short-term bearish momentum will decay and the medium-term repair logic will take over; if S1 fails, short-term weakness will transmit into the medium term, requiring reassessment.
VIII. Trading Strategies & Risk Management
Main strategy: Go long on a pullback to 15494 CNY (S1) on stabilization. Entry at 15494 CNY, stop-loss at 15004 CNY, target at 16473 CNY, horizon of 1-5 trading days, position size recommended not to exceed 15% of total capital. Entry logic: S1 is the first pivot support from September 24 and sits above the 20-day low of 15285 CNY; if stabilization signals appear on a pullback to this level, short-term bearish momentum will have been fully released, and combined with mean-reversion support from the gold-silver ratio's 18.12% low percentile on a 3-year basis, the rebound target looks toward above the September 23 close of 16165 CNY and extends to the 16473 CNY area.
Invalidation conditions: If price effectively breaks below 15004 CNY (the stop-loss level), S1 support is invalidated, short-term weakness persists, the strategy is voided, and we shift to a wait-and-see stance for a new stabilization signal below the 20-day low of 15285 CNY. If price does not pull back to S1 but instead breaks directly upward through R1 (15914 CNY) and holds above MA20 (16032.3 CNY), this resting order will not be filled, and we will not chase the rally.
Risk notes: ATR14 is 489.57 CNY, and the stop-loss distance of 490 CNY matches the volatility scale; VaR95 is -6.28%, and a single-day extreme loss could touch the stop-loss level, requiring strict execution. If macro rates rise further or China inventory accumulation accelerates, the bullish logic weakens and positions should be actively reduced.
IX. Week Ahead Data Calendar
Beijing 2026-09-28 Mon 09:30 / New York 2026-09-27 Sun 21:30 [CNY/MEDIUM] Industrial Profits ytd/y; Beijing 2026-09-30 Wed 09:30 / New York 2026-09-29 Tue 21:30 [CNY/HIGH] Manufacturing PMI (expected 50.1, prior 49.8) and Non-Manufacturing PMI (expected 49.3, prior 49.0); Beijing 2026-09-30 Wed 09:45 / New York 2026-09-29 Tue 21:45 [CNY/HIGH] RatingDog Manufacturing PMI (expected 51.7, prior 51.5) and Services PMI (expected 51.2, prior 51.4); Beijing 2026-09-30 Wed 21:45 / New York 2026-09-30 Wed 09:45 [USD/MEDIUM] Chicago PMI SEP (expected 51.3, prior 47.1); Beijing 2026-10-01 Thu 22:00 / New York 2026-10-01 Thu 10:00 [USD/MEDIUM] ISM Manufacturing PMI (expected 55.0, prior 54.6); Beijing 2026-10-05 Mon 22:00 / New York 2026-10-05 Mon 10:00 [USD/HIGH] ISM Services PMI SEP (expected 54, prior 55.4).
This report is generated automatically from public quantitative and macro data for research and market tracking only. It does not constitute any investment advice.