Silver Price Ends Consolidation, Is a New Round of Rally About to Begin? [SMM Analysis]

Silver Price Trend
In mid-to-late October, silver prices retreated from highs, with domestic SGE silver prices fluctuating in the range of 11,000-12,000 yuan/kg, while London spot silver hovered near the support level of $47-48/kg. After entering November, extreme short squeezes eased somewhat as silver ingot shipments from New York and Hong Kong arrived in London and ETF open interest declined, but spot supply of silver ingots remained tight.

Inventory Status
According to an SMM survey, the short squeeze in the London silver ingot market and the opening of the export window in October led to a "priority export of large ingots," keeping spot supply of silver ingots tight in the domestic market. This situation did not fully improve in November, with some smelters expecting it to persist until mid-December. Additionally, due to consecutive days of SGE bears choosing to pay deferral fees instead of making physical deliveries, bulls on the SGE faced difficulties in picking up goods. As of November 11, the SGE deferral fee settlement direction had indicated "shorts pay longs" for 12 consecutive trading days.

Market Expectations
In the short term, silver prices have held key support levels and ended the pullback phase but remain fluctuating at highs. The three key drivers—macro interest rate cuts, industrial demand gaps, and gold/silver ratio correction—remain unchanged, while ETF open interest continues to stay elevated. If inflation data this week aligns with expectations and no unexpected geopolitical easing occurs, bullish sentiment may reignite, potentially driving silver prices into a new upward trend.