Silver Sinks 5% — But Speculators Keep Leaning Long

Silver got hit hard on Tuesday, sliding roughly 5% at the lows as the post-payrolls dollar surge continued. Yet the latest CFTC Commitment of Traders report, released Friday with positions through June 2 shows speculators leaning the other way.

Through June 2, non-commercial speculators built on their silver length. Gross longs rose 1,175 contracts to 33,933, gross shorts trimmed their positions by 528 to 10,007, and the net-long position climbed 1,703 to 23,926, a bounce off what had been roughly a 28-month low.

Adding longs while covering shorts is about as clean a bullish signal as the data offers, but silver wasn't where the real crowding sat.

Saxo's Ole Hansen, in his week-to-June-2 COT review, flagged that the aggressive positioning was in gold, where a sharp reduction in shorts plus fresh longs left the metal exposed and in COMEX copper, where the net long hit a five-year high on tariff-related demand. Silver, platinum and palladium drew relatively limited interest.

In other words, silver added modest length into a top while the genuinely crowded trades elsewhere primed the complex for a violent unwind.

The full CoT data can be accessed here

That unwind arrived Friday. As May payrolls smashed expectations at 172,000, the dollar and Treasury yields rallied, and gold closed below its 200-day moving average for the first time since October 2023. When the anchor of the precious-metals complex breaks trend, silver — the higher-beta, more volatile cousin — doesn't get to sit it out. It led the move lower.

The macro backdrop is doing the heavy lifting. Resilient growth, sticky inflation expectations, firmer yields and a stronger dollar have flipped rate expectations hawkish — markets now price a 68% chance of a December Fed hike, up from around 14% a month ago. Higher real-rate expectations lift the opportunity cost of holding a non-yielding metal, and silver wears that pressure harder than gold.

The geopolitical bid drained at the same moment. Iran and Israel agreed to halt attacks, with President Trump pointing to ceasefire negotiations moving forward — de-escalation that pulled the safe-haven premium out of metals just as the rates story turned against them. The result: silver closed near $71.50 on Friday, slid toward $68.68 by Monday and traded around $67.53 on Tuesday — near its lowest since late March and down roughly 21.6% on the month, even as it holds a gain north of 80% year-over-year.

Hansen's framing captures the trap cleanly: speculators tend to buy into strength and sell into weakness, which leaves them holding the biggest long near the top of a cycle. The June 2 COT is a snapshot of exactly that.

None of this breaks the structural bull case, it just buries it under macro. Peru's Emergency Decree No. 003-2026, issued May 11 to address a national energy crisis, raised operational risk for a country producing roughly 130 million ounces of silver a year and supplying about half of China's imported silver concentrates.

Analysts model 6 million to 14 million ounces of plausible 12-month Peruvian supply destruction, layered onto the Silver Institute's World Silver Survey 2026 deficit of 46.3 million ounces, the sixth straight annual shortfall and the largest on record, with solar, electronics and AI demand keeping the structural pull intact.

Earlier this cycle, a Peru headline would have ripped silver higher. Today it barely registers against a hawkish dollar. That mismatch isn't a refutation of the deficit, it's what silver does when two large forces pull in opposite directions.

The COT divergence argues for near-term caution. Crowded — or even modestly long — books that buy into a top become the fuel for the next leg down once stops trip.

The CPI print may be a significant short-term catalyst especially if a strong CPI print comes through. This would reinforce the rate hike narrative and support the U.S. dollar thus dragging silver lower.

Silver Futures (SI1!) Four-Hour Chart, June 9, 2026

Source: TradingView

The technical posture is heavily negative following a recent "death cross" where the 100 SMA (74.568) dropped below the 200 SMA (76.407).

Price action decisively broke below the psychological 70.000 mark and previous consolidation around 68.000, which now serve as near-term resistance.

However, the RSI has plunged into deep oversold territory at 22.496, suggesting the selloff may be overextended and primed for a short-term relief bounce.

Immediate downside support sits at the 64.000 level. If broken, 62.000 is the next key target to watch, while any upside recovery will face immediate, stiff resistance at the 68.000 to 70.000 zone.