Silver and gold show rebounds amid the wave of position adjustments

On February 3rd, the markets saw a significant rebound in silver and gold, reversing the recent historic selling pressure and turning upward. However, according to analyses from multiple financial institutions, this rebound is merely a technical correction driven by short-term factors and position adjustments, and does not indicate a fundamental trend reversal. As emphasized by analysts such as BlockBeats, while technical indicators suggest overheating and crowded positions, the underlying factors supporting a bullish trend in silver and gold remain healthy.

Short-term Bounce and Long-term Foundation Divergence

Deutsche Bank’s latest report notes that the decline in silver and gold prices is not as severe as the superficial negative factors suggest. It is important that investors across all layers—official institutions, institutional investors, and individual investors—are not substantially weakening their willingness to allocate assets to precious metals. The current market environment is fundamentally different from the long-term bearish markets observed in the 1980s and 2013. Unlike those periods, the basic conditions today are actually more solid.

Geopolitical and Policy Risks Provide Support

Barclays’ analysis points out that rising geopolitical uncertainties, increasing policy risks in various countries, and the trend of central banks diversifying their reserve assets continue to strongly support demand for gold. On the other hand, for silver, retail investor participation is high, which limits liquidity and can lead to larger price fluctuations. Nonetheless, the industrial importance of silver is gradually being recognized more in the market.

Industrial Demand for Silver as a New Growth Driver

Demand for silver in growing industries such as solar energy, data centers, and AI infrastructure continues to accelerate. As these sectors expand rapidly due to technological advancements, the consumption of silver for industrial purposes is increasing year by year. Particularly, as AI-related technological infrastructure develops globally, the demand for silver as a component is expected to continue rising.

Supply Constraints Support Long-term Markets

A key point is the structural reality that the pace of silver supply growth is unlikely to keep up with demand expansion. Over the coming years, the gap between supply and demand is expected not to narrow but to widen. Such supply constraints will continue to underpin bullish markets for silver and gold. While waves of short-term position adjustments may persist, the fundamental supply and demand balance that supports the long-term upward trend of silver and gold remains unchanged.