Silver prices fluctuate, banks warn of short-term risks

In a report released on Wednesday morning, commodity analysts at Societe Generale said that annual index rebalancing is creating significant risks for silver and gold prices, as these are the two assets with the strongest increases in 2025.

Last year, gold and silver recorded the best increase since 1979; in which silver increased by nearly 150%, and gold prices increased by 64%.

According to analysts, gold and silver currently account for about 11% in the Bloomberg Commodity Index (BCOM).

The strong upward momentum at the end of the year pushed silver to the top position in terms of expected net selling volume. We estimate the capital outflow (net selling) from silver and gold at about 5 billion USD each," the report stated.

In the opposite direction, Societe Generale believes that the energy market has the most potential. Based on rebalancing forecasts, the French bank believes that Brent oil could attract investment capital of nearly 2.6 billion USD, while West Texas Intermediate (WTI) crude oil could receive about 1.7 billion USD.

This potential shift takes place in the context that Brent oil prices are trading below 60 USD/barrel, the lowest level in nearly 5 years.

However, Societe Generale said that the item with the greatest short-term price increase potential is natural gas.

Natural gas is no longer predicted to be the most strongly sold item on a large scale; currently, this item is expected to shift to net buying, as prices have decreased by 23% since our previous analysis in early December" - analysts said.

Not only Societe Generale, many other banks are also closely monitoring fluctuating risks for gold and silver.

We forecast that about 13% of the total number of contracts opened on the Comex silver market will be sold in the next two weeks, leading to prices possibly being sharply adjusted down," said Daniel Ghali - senior commodity strategist at TD Securities, in a report last week.

In a report released on Tuesday, Mr. Ole Hansen - Head of Commodity Strategy at Saxo Bank, said that any price weakness could be an opportunity to buy, because both gold and silver are entering the new year as pillar assets of the global economy.

Rebalancing the indices may cause the market to fluctuate strongly in the short term. However, if prices decrease, the main reason comes from the technical shift in cash flow, not because the market's fundamentals worsen," Hansen emphasized.