CTA Selling Activity to Weigh in Silver Markets – TDS

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

The fundamental outlook for silver remains strong

“The current price action is already in line with a sell program totaling -6% of the algos’ maximum 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 gradually capturing an increasing share of total silver demand as next-generation technology adoption continues to outpace expectations with significantly higher silver loadings .”

“Signs that Chinese producers have started saving silver are noteworthy for the longer-term outlook, but are unlikely to affect silver demand growth for next year. Evidence of emerging bearish trends should also be best expressed in the white metal, given that traditional industrial demand has been the main concern in recent months, in addition to risks arising from gold positioning.”