Silver suffered a steep decline on October 15, falling roughly 6% as hotter U.S. inflation data pressured precious metals and triggered another round of selling across broader markets. The metal dropped from around $60 toward the mid-$50s before beginning to recover, leaving the $55–$56 zone as the first key area to watch.
But the selloff may not have been a clean fundamental liquidation, according to Macro Liquidity analyst Sunil Reddy. He pointed to unusual activity in the iShares Silver Trust (SLV): SLV shares outstanding increased by about 450,000 shares during the selloff, representing roughly 400,000 ounces of additional silver backing. If investors were simply abandoning silver, Reddy argued, the more likely outcome would be redemptions and falling shares outstanding—not an expansion.
Reddy said authorized participants and market makers can temporarily satisfy strong ETF demand by selling or shorting SLV shares while managing their underlying silver exposure separately. A fast selloff can flush leveraged longs, trigger stop-loss orders and push momentum traders to the short side, creating sell-side liquidity that allows previously established shorts to be covered at lower prices before new shares are created against physical silver. “Price was crushed. SLV demand was not,” he wrote. Reddy acknowledged that SLV data alone cannot prove the entire move was deliberately orchestrated, but said the flows do not look like a market where underlying demand simply disappeared.
Separately, analyst Stefano Bottaioli highlighted a rare technical setup. Silver is trading near $56.77 after a prolonged decline from its January peak near $121. He noted that the percentage distance from the 200-day exponential moving average has printed a double bottom around 13% to 15% below the average. Bottaioli identified only two comparable extremes over the past six years: March 2020, which preceded a roughly 160.6% surge, and the July–October 2022 period, which ignited a 540.1% mega-rally. He stressed that those advances were extended moves across different market conditions rather than immediate jumps, and that price confirmation remains essential.
The immediate focus is whether silver can hold support near $55. A sustained defense would preserve the recovery case, with the next checkpoints at $60 and $63. A later test near $71 would challenge the previous larger rebound. A sustained break below $55 would weaken the bullish setup and leave the oversold indicator insufficient as a recovery argument.
