Silver Recovers Ground as AI Jitters Drive Safe-Haven Shift

Silver futures were changing hands at $57.60 an ounce on Friday, extending a rebound that began a day earlier, as investor unease over the scale of spending on artificial intelligence rattled equity markets and pushed capital toward the safety of US Treasuries.

That rotation, first reported by Reuters, weighed on US bond yields and handed precious metals a tailwind. Thursday's session saw the front-month contract add 3.2%, setting the stage for Friday's firmer tone.

A Week of Two Halves

The recovery follows a bruising stretch. Midweek, US inflation figures cooled rate-cut expectations and knocked silver sharply lower — during Wednesday's US session the metal tumbled 6.0% to $55.80 an ounce. Consumer prices for September rose 3.7% year-on-year, overshooting forecasts, while producer prices climbed 1.3% month-on-month. Markets briefly priced a December rate hike at close to 99% probability, according to media reports.

Because silver pays no yield, it suffers when borrowing costs rise and the dollar strengthens. Christian Habeck of n-tv pointed to persistent downside risks, citing the firm greenback and elevated rates as drags on demand. Independent market watcher Florian Grummes noted earlier in the week that a durable trend reversal would also require momentum from the gold complex — something still absent.

Thursday's pullback in Treasury yields offered the first counter-move, though whether it holds depends heavily on the tone struck by Federal Reserve Chairman Kevin Warsh, who addresses the International Monetary Fund's annual meetings in Bangkok on Friday. Analysts also flag continued headwinds from elevated crude oil prices tied to the Iran conflict, which complicate the inflation picture.

Vaults Fill Up on Both Sides of the Pacific

Away from the rates debate, the physical picture is turning heavier. CME Group reported COMEX inventories rising by 1.2 million fine ounces to 333.2 million ounces at midweek, split between 103.1 million ounces in the registered category and 230.1 million ounces eligible. The London Bullion Market Association, meanwhile, recorded a 3.22% increase in London silver holdings during the third quarter of 2026, bringing them to 28,985 tonnes.

Asia tells a similar story. Shanghai Metals Market put China's social silver stocks at 3,909 tonnes as of Thursday, and reported that Chinese buyers have grown reticent about fresh purchases at current price levels. Chinese silver bars traded in Hong Kong this week at a spot discount of $0.10 to $0.15 an ounce versus LBMA quotes.

Supply Outlook and the Longer View

Those swelling inventories are feeding a broader conversation about market balance. Deutsche Bank said on October 7 that a supply surplus could emerge in the global silver market by 2027, according to media reports, pointing to rising stockpiles alongside fading momentum in industrial demand. The Silver Institute, by contrast, estimates global mine production will slip 0.3% to 844.1 million ounces across 2026.

The cautious mood is visible in the longer-term chart: silver has lost 21% since the start of the year and remains well below the peaks touched in recent months.

What Traders Are Watching

Near-term attention now turns to a pair of data releases. Friday brings the Commodity Futures Trading Commission's weekly report on speculative positioning, which will show how far institutional investors have already adjusted their exposure. On Sunday, China's September industrial production figures arrive — a key gauge of factory demand for the metal. The broader policy path should become clearer at the end of the month, when the Federal Reserve meets on October 27 and 28.