Silver markets are likely to be weighed down by CTA selling activity, TDS macro analyst Daniel Ghali notes.

Fundamental outlook for Silver remains strong

“Current price action is already consistent with a selling program totaling -6% of algos' max size, equivalent to -28% of their current position size. The fundamental outlook for Silver remains strong, with Silver-for-solar continuing to make inroads and progressively capturing a growing share of total Silver demand as next-gen technology adoption continues to beat expectations, with notably higher Silver loadings.”

“Signs that Chinese manufacturers have started to thrift Silver are worth noting for the longer-term outlook, but likely won't make a dent in Silver demand growth for the coming year. Evidence of reflationary trends emerging should also be best expressed in the White Metal, given traditional industrial demand has been the primary concern over the last months in addition to risks emanating from gold positioning.”