Spot Silver Analysis: Supply and Demand Gap Supports Strength, High-Level Consolidation Awaiting Breakthrough

Currently, spot silver remains in a high-level consolidation pattern. London Silver is quoted at $94.48/oz, down 0.42% intraday. After breaking through the key $90 level, bullish and bearish divergences have intensified, but the medium- and long-term upward logic remains intact. The core drivers stem from the resonance of supply-demand contradictions and financial attributes.

1. Triple Resonance Strengthens the Foundation for Upside

The recent rise in silver is not short-term capital speculation but the result of the resonance of three forces: currency, policy, and industrial demand. From the industrial side, the ongoing widening of the supply-demand gap provides the strongest support. The global silver supply-demand gap is expected to reach 203 million ounces by 2026, a near-decade high. As the largest industrial demand source, the photovoltaic industry accounts for 40% of industrial silver use. This year, global photovoltaic new installations will drive silver demand to 210 million ounces; combined with growth in AI servers and new energy vehicles (Tesla's 4680 batteries increasing silver per vehicle), the rigid support from industrial demand continues to strengthen.

On the supply side, rigid constraints prevail. Over 70% of silver is associated with ores, with production dependent on copper, lead, and zinc mining. Expansion cycles are long, lasting 5-10 years. Silver mine production is expected to decline 0.6% YoY in 2026, while recycled silver can only grow modestly by 2.5%, far from filling the demand gap. Regarding financial attributes, the Fed's rate cut expectations continue to rise, lowering the opportunity cost of holding silver. Coupled with the destabilization of the dollar's credit foundation, silver's inflation hedge and store of value functions are being re-evaluated, attracting continuous capital inflows.

2. High-Level Consolidation, Key Levels Under Pressure

On the daily chart, after breaking through $90, silver entered a high-level consolidation. It is currently trading above the 5-day and 10-day moving averages, with the moving average system maintaining a bullish alignment, indicating a good medium- and long-term trend. However, the RSI indicator is in the overbought zone and has recently shown a "pullback after surge" pattern, reflecting profit-taking pressure at high levels. The 4-hour Bollinger Bands are narrowing, with the upper band resistance at $94.7–95, and the lower band support at $92.5–93, showing clear consolidation characteristics.

Key price levels: $95 is a short-term strong resistance. A volume breakout is needed to open the upward space toward $96–100. The recent consolidation center is around $93; if broken, a correction to test $92 is possible. The strong support level is focused on $90 (previous breakout level, now transformed into an important support).

3. Trading Strategy and Risk Tips

It is recommended to adopt a strategy of "relying on support for positioning and avoiding blind chasing." When the price stabilizes around $92.5–93, consider entering long positions with light positions, setting stop-loss below $90, and targeting $94.7–95. If volume breaks through $95, follow up with long positions toward $96–98. If resistance at high levels causes a reversal and the price falls below $92, switch to a consolidation approach and avoid forcing bullish positions.

Risk Tips: Be alert to changes in Fed rate cut expectations and the strengthening of the dollar, which may suppress silver prices; also monitor photovoltaic installation data falling short of expectations and industrial substitution risks. During high volatility, strictly control positions and stop-loss levels.