Julius Bär Turns Defensive on Silver as India's Import Window and Rate Fears Pull the Market in Two Directions

Julius Bär has lowered its stance on silver to "Neutral," with technical analyst Mensur Pocinci pointing to a pullback toward $45 an ounce following the metal's recent setback. Rather than positioning for a swift rebound, the Swiss bank's house view now puts the risk of further losses front and center.

The more cautious call extends beyond the short-term chart picture. Julius Bär's longer-horizon assessment of silver also stays restrained, and no clear buy recommendation emerges from it. Commodity expert Carsten Menke likewise rates silver "Neutral," with a twelve-month forecast of $49.50 per troy ounce — just below the current spot price of $49.65, a gap that underscores the bank's measured outlook.

Precious metals are not being written off wholesale

Within the metals complex, the analysts draw a sharp distinction. Pocinci remains optimistic on gold, and Menke describes its prospects as constructive. The skepticism is therefore specific to silver rather than a blanket rejection of the entire precious metals space.

On the other side of the technical ledger, StoneX analyst Razan Hilal identifies a long-term support zone formed by a Fibonacci retracement and a multi-year trendline. At the same time, the relative strength indicator sits near a multi-year oversold level. Such a setup can argue for stabilization — but it does not yet amount to a confirmed reversal. Other technical readings likewise suggest that oversold conditions have so far failed to spark any meaningful recovery.

Energy costs and rate expectations weigh on any bottoming attempt

The broader economic backdrop is adding pressure. Reuters reports that fresh US strikes on Iranian targets are driving oil prices higher, and costlier energy feeds inflation worries along with expectations that US interest rates will stay elevated for longer. According to CME FedWatch, traders assign roughly a 73% probability to a US rate hike in December. Silver coverage also cites selling in technology and AI stocks, plus uncertainty ahead of today's US midterm elections, as additional drags.

Technical weakness is thus colliding with a tense market environment. A durable recovery would require selling pressure to ease; pointing to oversold indicators alone will not do the job.

India's import approvals: potential, not purchases

A separate strand of support may be forming on the physical side. Heraeus reported yesterday on import approvals for roughly 6,500 tonnes of silver over the coming six months, which could lift inflows and consumption over the next two quarters. For the silver price, that is a possible backstop after the recent selloff — though not yet evidence of purchases actually made. The distinction between a permit and an import matters: the approvals open a demand perspective that reaches beyond short-term financial-market swings, but they cannot be equated with realized demand.

Yesterday's rebound had a different trigger altogether. According to Reuters, falling oil prices eased inflation concerns and encouraged buying of precious metals, following reports of progress in possible US-Iran negotiations — though no negotiated outcome was confirmed. Silver finished yesterday's session at $50.54 per troy ounce, a gain of 2.9%, a recovery from Friday's selloff whose durability will depend on whether the Indian approvals are actually used.

A deficit forecast meets ample available stocks

Supply-side signals are no more clear-cut. The "World Silver Survey 2026" from the Silver Institute projects a deficit of 46.3 million ounces for the current year — the sixth consecutive deficit year. Yet available inventories undercut any reading that treats a paper deficit as metal immediately missing from the market. Metals Focus put London silver stocks at the end of September at 932 million ounces, of which around 267 million ounces were available outside physically backed exchange-traded products. For 2027, Metals Focus expects a supply surplus.

What matters for price impact, then, is not only the annual gap between supply and demand but also which stocks are available to the market outside committed investment products. The Silver Institute also expects industrial fabrication to fall by about 3% in 2026, particularly because of photovoltaics — so the projected deficit sits alongside weaker industrial demand.

For investors, the picture resists a single verdict. The supply situation remains a supporting factor, while demand expectations, rate risks and the more cautious analyst ratings all argue against jumping early on a recovery thesis. India's import green light improves the demand outlook but does not remove the macroeconomic risks that Reuters cited behind Friday's decline — inflation worries and expectations of a possible US rate hike. Two forces now stand side by side: possible additional physical demand, and rate-dependent investment interest. Yesterday's relief in oil prices helped silver in the short run; broader support from India would require the approvals to translate into higher imports and extra consumption.