Iran escalation lifts oil, pressures silver; $48M sold

Iran’s recent escalation in the Middle East lifted oil prices and coincided with a fall in silver of about 1%, with tokenized-market tracker Hyperliquid reporting roughly $48 million in net selling over a 30-day window. Silver traded near $74, well below its January peak near $121.

Iranian state reports this week said Tehran suspended talks with the U.S., threatened to close the Strait of Hormuz and carried out missile and drone strikes on regional targets. U.S. crude futures (WTI) rose more than 5% on June 1 and have gained about 8% week-on-week.

The two markets have moved in opposite directions recently. The 30-day rolling correlation between crude oil and silver sits around minus 0.42. Since early March, crude has risen roughly 28% while silver has fallen about 10%.

Positioning data showed speculators were already reducing bullish exposure before the latest oil-driven move. The COMEX Commitments of Traders report for the week to May 26 recorded non-commercial traders cutting 1,833 silver long contracts and adding 615 shorts. Commercial hedgers trimmed 1,278 shorts and added 497 longs. Total open interest in silver futures rose by about 993 contracts to roughly 101,744.

Hyperliquid’s 30-day window recorded net selling of about $48 million in silver on tokenized and spot platforms. Gold posted similar net outflows of about $50 million over the same period. Silver volume on those platforms ran near $5.3 billion for the period measured.

Options activity on the iShares Silver Trust (SLV) showed put-call ratios of about 0.44 by volume and 0.53 by open interest as of June 2, with calls outnumbering puts on both measures.

A client note from JPMorgan expressed continued caution on silver until speculative activity from the 2025 rally abates. The split in the COT report between non-commercial trimming and commercial hedgers reducing shorts reflects differing positions across market participants.

A Silver vs Solar Lag Model, which compares silver’s market price with a signal derived from solar-sector demand, registered about minus 2.77. The model previously bottomed near minus 3.35 in mid-May 2025 when silver traded near $32, before rising to the January record above $121. The current reading indicates a gap between the spot price and the model’s solar-demand signal.

Fundamental supply and demand data show a sustained deficit in silver. Demand has exceeded supply for five consecutive years, and 2026 is projected to be a sixth year of net shortage. Higher prices have led solar panel manufacturers to reduce silver content per panel, with industrial silver demand expected to fall about 2% this year. Mine supply has contracted, keeping the market in overall deficit.

Markets currently show split signals: higher oil and cash-market selling have coincided with weaker spot silver, while options flows, some commercial hedger positioning and the solar-demand model point to a gap between the current price and longer-term industrial demand metrics.