Silver Holds Above $72 Despite Dollar Strength
Silver showed resilience today, dipping only 0.33% to $72.79 despite the US Dollar Index holding firm at 100.076. With gold touching new highs at $4,699.40, the gold-silver ratio compressed further to 64.56, suggesting silver may be building strength for its next move higher.
Shanghai Premium Signals Asian Demand
The standout story continues to be Asian physical demand, with Shanghai silver trading at a robust 11% premium to COMEX spot prices. This $80.78 Shanghai price reflects sustained physical buying despite silver's recent consolidation.
| Market | Price | Premium to Spot |
|---|---|---|
| COMEX Spot | $72.79 | |
| Shanghai | $80.78 | +11.0% |
| Physical Dealers | $78.46 avg | +7.8% |
Commercial Positioning Remains Constructive
The latest CFTC commitment of traders data shows commercials net short 38,857 contracts as of March 31st. This moderate short position—well below the typical 50,000+ contract levels seen at major tops—suggests limited downside pressure from the smart money crowd.
Physical Market Dynamics
Dealer premiums tell an interesting story of selective demand:
- American Eagles: 14.4% premium reflects collector demand
- Generic rounds: 7.8% premium shows steady stacker interest
- Junk silver: 4.9% premium offers the best value proposition
ETF holdings remain stable with SLV at 490.7 million ounces and PSLV at 216.8 million ounces, indicating institutional positions are largely unchanged.
What to Consider
With junk silver premiums at just 4.9%—roughly half the premium of generic rounds—constitutional silver (pre-1965 US coins) presents exceptional value for stackers today. These coins offer the dual benefit of silver content plus numismatic upside, making them particularly attractive when premiums compress below 5%.
For those waiting to add to positions, watch for any pullback toward $70. The combination of moderate commercial shorts, persistent Asian premiums, and silver's relative strength versus the dollar suggests support levels are rising.
Bottom Line
Silver's ability to hold above $72 while the dollar remains elevated demonstrates underlying strength. The 11% Shanghai premium continues signaling robust physical demand, while manageable commercial short positions suggest room for upside. Junk silver at sub-5% premiums offers the best entry point for new stackers, while the compressed gold-silver ratio below 65 keeps silver positioned for potential outperformance. Watch for any weakness toward $70 as a strategic addition opportunity.
References - LBMA Silver Price: https://www.lbma.org.uk/prices-and-data/precious-metal-prices - COMEX Silver: https://www.cmegroup.com/markets/metals/precious/silver.html - CFTC COT Report: https://www.cftc.gov/dea/futures/deacmxsf.htm
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