Silver Sees $48M Net Selling as Oil Jumps on Iran Tensions

Silver recorded about $48 million in net selling across tokenized and spot markets as oil rose more than 5% on June 1 after Iran suspended talks with the U.S. and threatened to close the Strait of Hormuz. The metal traded near $74, roughly 1% lower on the session.

On-chain flow data over a 30-day window showed roughly $48 million of net selling in silver and about $50 million in gold. Silver trading volume was near $5.3 billion during the session.

WTI crude rose more than 5% on June 1, reversing earlier declines and lifting weekly gains to above 8% as markets reassessed supply risk following Tehran’s announcement. The rise in oil has implications for inflation and costs for industrial users of silver.

Positioning reported in the COMEX Commitments of Traders for the week to May 26 showed large speculators reduced bullish exposure before the latest oil move. Non-commercial traders cut longs by 1,833 contracts and added 615 shorts. Commercial hedgers trimmed shorts by 1,278 contracts and added 497 longs. Total open interest increased by about 993 contracts to roughly 101,744.

Options activity diverged from cash flows. On the iShares Silver Trust (SLV), the put-call ratio was 0.44 by volume and 0.53 by open interest on June 2, indicating calls outnumbered puts. Options traders retained more bullish bets even as spot and tokenized markets saw net selling.

The 30-day rolling correlation between silver and crude oil sat near minus 0.42, reflecting a tendency for silver to weaken when oil strengthens. Since early March, U.S. crude has risen about 28% while silver has fallen about 10%.

A Silver vs Solar Lag Model used by some analysts placed the gap between silver’s market price and a solar-demand-based signal near minus 2.77, close to a prior low of minus 3.35 in mid-May 2025 when silver traded near $32. The model compares price levels with expected demand from the solar sector and currently shows the price below that solar-demand signal.

Physical supply data cited by market participants show silver has run a supply deficit for five consecutive years, with 2026 projected to be a sixth year of deficit. Higher prices have led some solar manufacturers to reduce silver usage per panel, and industrial demand is expected to fall about 2% in 2026.

Investment banks have expressed caution, noting they will wait for speculative activity that pushed prices higher in 2025 to ease before adopting a more bullish stance. Geopolitical developments, including reported missile and drone strikes and follow-on actions, prompted market focus on potential disruptions to shipments through the Strait of Hormuz. The immediate oil reaction translated into selling pressure in silver spot markets while some derivatives traders maintained longer-dated bullish exposure.