Silver has continued to trade firmly despite rising energy prices. Recent buying by Commodity Trading Advisors (CTAs) has slowed.
Trading activity on the Shanghai Futures Exchange (SHFE) has shown renewed demand. Top traders on the SHFE have been steady buyers over the past month.
Chinese premiums have stayed strong. The import arbitrage has been open at various times over the last couple of weeks.
This market setup points to demand from the East as a key support for silver, beyond systematic CTA activity. The article was produced using an artificial intelligence tool and reviewed by an editor.
We are seeing silver hold its value well, showing impressive resilience even as rising energy prices create headwinds for other assets. While the pace of buying from large systematic funds has slowed, the price strength appears to be coming from a different, more fundamental source. This suggests the current support for silver is robust and not just driven by short-term speculation.
The primary driver is strong demand from China, where traders on the Shanghai Futures Exchange have been consistent buyers over the last month. Recent data supports this, with China’s silver consumption in the first quarter of 2026 up nearly 7% year-over-year, largely due to demand for solar panels and electronics. This physical demand is confirmed by persistently high local premiums and an open import arbitrage window.
This situation indicates that the demand is based on real-world use rather than just financial flows, providing a solid floor for the price. Looking at historical data, we saw a similar setup in the spring of 2025 when strong Eastern buying preceded a significant price rally after a period of consolidation. The Shanghai Gold Exchange, a key indicator of wholesale demand, has also shown weekly physical withdrawals averaging over 160 metric tons, a 5% increase from the previous quarter.
For traders, this suggests that bullish positions could be warranted. Buying call options with strike prices slightly above the current market level, such as for the July or August 2026 contracts, would be a direct way to capitalize on potential further upside. This strategy offers a defined risk while allowing participation in any continued rally driven by this fundamental demand.
Alternatively, for those who believe the strong Chinese bid will prevent significant price drops, selling out-of-the-money put options could be an effective strategy. This approach allows traders to collect premium, profiting if silver remains stable or continues its upward trend. Given that silver has established a strong support level over the past several weeks, this strategy seems well-grounded in the current market structure.
