Goldman Sachs commodity strategist Robert Quinn noted in his latest report that the silver market is in a quagmire. Over the past three weeks, managed funds have cumulatively net sold $2.2 billion in silver futures, driving net long positions to their lowest level on Goldman Sachs' two-year chart (approximately $1.7 billion).

The report analyzes that despite the DXY retreating by 0.5% between October 13 and 20, silver prices still fell by 2.6% during the same period, breaking the previous logic that "the dollar was the sole drag." Simultaneously, AI data centers and solar sectors, which serve as barometers for silver's industrial demand, also collapsed, with the data center sector falling by 7.9%, US solar companies by 4.7%, and Chinese solar by 1.6%, further weakening the industrial demand outlook for silver.

Goldman Sachs data shows that the put option skew in the options market has reached a one-year high, indicating large-scale buying of downside protection. Quinn believes that the current extreme short crowding provides conditions for a tactical rebound, but the ongoing escalation of the situation in Iran, which is pushing up oil prices and the dollar, makes any rebound difficult to sustain. For silver to break out of its stalemate, a de-escalation of the situation in the Strait of Hormuz or a worsening AI credit crisis that forces the Federal Reserve to pivot to interest rate cuts would be required.