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(Source: Daily Sentiment Index Data, Author’s Chart)
As shown in the chart above, the medium-term moving average for silver sentiment has slid to its lowest levels since early 2019, currently sitting at a reading of barely 25%. This is a massive sea change from six months ago when market participants were trying to incite a squeeze in silver, and the medium-term moving average soared above 75% bulls, with three bulls for every one bear in the market. With this reading now reversed (three bears for every one bull), sentiment has finally become a tailwind, with further weakness likely to present a buying opportunity. This is because when bearish sentiment dominates a market, there’s few left to sell or short. Based on history, sentiment can always get worse, but for the first time in two years, sentiment for silver has flipped to a contrarian bullish reading.
