Silver Pulls Back as Dollar Strength Tests $75 Support

Silver gave back nearly 3% today, dropping from $77.74 to $75.58 as dollar strength pressured precious metals across the board. The selloff comes after a strong run that pushed silver well above its 200-day moving average, making this pullback a natural test of technical support levels.

Key Market Movements

The most notable development is silver's retreat from yesterday's highs, with the gold-silver ratio climbing to 62.16 as gold at $4,697.90 held up better than silver during today's correction. This divergence often signals profit-taking in silver after strong moves, rather than fundamental weakness.

The Shanghai premium remains elevated at $10.30 per ounce (13.6% above COMEX), indicating continued strong physical demand from Asian markets despite the paper price correction. This disconnect between physical and paper markets has been a consistent theme as institutional money flows into precious metals amid ongoing monetary uncertainty.

COMEX commercial positioning shows a net short of 40,133 contracts from the April 14th COT report, which is actually in a more neutral range compared to the extreme short positions we've seen during previous silver rallies. This suggests commercials aren't aggressively fighting this price level, potentially limiting downside pressure.

What This Means for Stackers

Today's pullback offers the first real buying opportunity in weeks for stackers who missed silver's move from the $60s. Physical premiums remain elevated but stable, with American Eagles at 27.9% and generic rounds at 15.8%. Notably, junk silver premiums have compressed to 13.3%, making pre-1965 coins increasingly attractive for cost-conscious stackers.

The technical picture shows silver testing the $75 level, which has acted as resistance in previous months and now serves as potential support. A clean bounce here would be constructive, while a break below could target the $70-72 zone where longer-term buyers have historically stepped in.

What to Consider

With junk silver premiums at just 13.3% - significantly lower than Eagles or rounds - 90% silver coins represent the best value play in today's market. The 0.715 multiplier on junk silver means you're paying roughly $78.65 per ounce equivalent, compared to $96.67 for Eagles at current premiums.

ETF flows show continued institutional interest with SLV holdings steady at 488.7 million ounces, suggesting today's decline is more technical than fundamental.

Bottom Line

Silver's 2.8% pullback looks like healthy profit-taking after a strong run, not a fundamental shift. The $75 support test, combined with persistent Shanghai premiums and reasonable commercial positioning, suggests this dip may be short-lived. Junk silver's compressed premiums offer stackers the best entry point we've seen in weeks.

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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