After a price increase of almost 150% in 2025, the Canadian bank TD Securities is once again betting on a significant correction in the price of silver – with a price target of just USD 40 per ounce!
TD Securities goes short on silver price again
Silver has recently failed to hold the USD 80 per ounce mark – and it is precisely at this point that TD Securities sees another opportunity to enter on the short side. In a recent commodities report, the bank’s experts announced that TD Securities has opened a short position in March silver futures at USD 78 per ounce.
The price target is USD 40, which is roughly half the current price level! At the same time, a stop-loss was set at USD 92 per ounce. The bank is thus playing out a scenario in which the rally in the silver market has reached its cyclical peak and a phase of consolidation is imminent.
At the time of the report, March silver futures were trading at USD 77.94 per ounce – a decline of almost 4% on the day. Previously, silver had reached around USD 84 per ounce at its peak last year, marking a new all-time high. Overall, the price of silver rose by almost 150% in 2025 and was one of the strongest commodities overall.
Rebalancing and fundamentals: Why TD Securities is skeptical about silver
TD Securities’ new short bet on silver is closely linked to the upcoming annual index rebalancing. The bank expects that around 13% of the total open interest on the COMEX will be sold via index rebalancings in the coming two weeks. From the bank’s perspective, such selling pressure from passive products could trigger a “dramatic downward revaluation.”
At the same time, TD Securities sees a shift in the supply and demand situation in the silver market. The record rally to up to USD 84 per ounce was largely driven by disruptions in the physical supply chain, strong industrial demand and fears of further bottlenecks. Robustly increasing demand in areas such as the solar industry, electronics and the automotive sector has repeatedly led to physical supply deficits in recent years and noticeably reduced inventories.
TD Securities now argues that the high prices themselves are beginning to “heal” the market: demand is being reduced in individual segments (demand destruction), while higher prices are stimulating recycling and increasing the willingness to put existing inventories back on the market. From TD Securities’ point of view, these are classic signals of a mature cycle in silver – with an increasing probability of a correction phase.
Silver, tariffs and the USA: A possible catalyst for the price decline
Another key factor for TD Securities’ assessment is the political component surrounding the classification of silver as a “critical metal” in the USA and the discussion about possible import duties. The mere prospect of US tariffs led to large quantities of physical silver flowing into the USA in 2025 and remaining there, which contributed to an additional shortage outside the USA.
However, the bank expects that silver imports will not ultimately be subject to tariffs. If this assessment is confirmed, some of the metal “parked” in the USA could flow back into the global market – for example via exports, reallocations from private vaults or an increased supply of scrap material. TD Securities expects that this will replenish London’s inventories and reduce the pressure on physical premiums.
The bank summarizes this view as follows: The primary supply deficit in the silver market is shrinking, the period of time until a hypothetical inventory depletion is lengthening, and the market data bears “the hallmarks of a cycle high.” Many analysts at least share the point that real tariffs on silver would massively burden the US industrial sector – such as electronics, solar and precision mechanics – as domestic silver production cannot nearly cover local demand. Accordingly, numerous market observers consider a tariff burden on silver to be unlikely.
Second attempt: TD Securities and the risks of a silver short bet
It is worth noting that TD Securities is making a second attempt with the new short positioning in silver. The bank had already entered into a short bet in October 2025, when the price of silver had just exceeded the USD 50 per ounce mark. However, this position had to be closed again with a loss of around USD 2.4 million after the market moved further upwards and reached new highs in the short squeeze.
TD Securities’ current assessment thus also shows how extraordinarily dynamic the silver market is in the current phase. Despite structural supply deficits in recent years, individual firms – such as TD Securities – now see an overextension in the short term and are betting on a normalization of the price level.
At the same time, silver remains an extremely volatile commodity, the price of which often reacts more strongly and quickly than that of gold. Should the expectation of an easing in physical supply prove to be incorrect or should new geopolitical and financial shocks occur, the market may continue to show violent upward spikes – with corresponding risks for short positions.
Whether TD Securities’ current short strategy prevails in the price of silver or is once again “overrun” by the market should thus become another litmus test for the stability of the recent record rally in silver.
