Silver prices fell more than 1% day-on-day Tuesday, trading near $74 an ounce and pulling further away from the January record above $121. The decline came as traders parsed fresh data showing large speculators on the COMEX had trimmed bullish wagers, even as a spike in crude oil and threats from Iran to close the Strait of Hormuz injected fresh uncertainty into markets.
What the COT report shows
In the latest Commodity Futures Trading Commission data for the week ending May 26, large speculators — typically hedge funds and money managers — cut their long silver positions by 1,833 contracts and added 615 short contracts. On the other side, commercial hedgers trimmed shorts by 1,278 contracts and piled on 497 new longs. Overall open interest edged up by 993 contracts to roughly 101,744.
JPMorgan said it remains cautious on silver until the froth from 2025’s run shakes out further. The bank didn't give a timeline for when it might turn more bullish.
Oil surge and the silver correlation
West Texas Intermediate crude jumped more than 5% on June 1 and is now up over 8% week-on-week. The rally accelerated after Iranian state media announced Tehran had suspended talks with the United States and vowed to fully close the Strait of Hormuz, a chokepoint for about a fifth of the world's oil supply. A separate, unverified tweet cited in market reports claimed Iran launched a massive ballistic missile and drone attack striking the US 5th Fleet headquarters in Bahrain, US bases in Kuwait, and an oil tanker near Dubai.
Silver and oil have been moving in opposite directions lately. The rolling 30-day correlation between the two sits near -0.42, meaning they tend to diverge. Since early March, crude has gained roughly 28% while silver has slipped about 10%.
Other signals in silver markets
On the decentralized exchange Hyperliquid, silver showed net selling of roughly $48 million over a 30-day window. That’s close to the $50 million in net selling seen in gold over the same period.
In the options market for the iShares Silver Trust (SLV), the put-call ratio stood at 0.44 by volume and 0.53 by open interest as of June 2. A ratio below 1 means call options — bets prices will rise — outnumber puts. That suggests options traders are leaning bullish, at least in the near term.
The Silver vs Solar Lag Model, which tracks silver prices relative to solar-driven industrial demand, dropped to about -2.77. That’s a rare discount, signaling that silver may be undervalued compared with the demand coming from solar panel manufacturing.
Still, with geopolitical risks escalating and speculators still trimming long exposure, the metal faces headwinds. The key question hanging over the market is how long it takes for that froth JPMorgan flagged to fully clear — and whether a real Iran confrontation would flip silver’s negative correlation with oil into something else entirely.
