Alpha Report
Silver | 2023–2026

1. Executive Summary

Signal Coverage — Silver

SI Macro Review

2023: Silver experienced significant volatility throughout 2023, trading in a range between $20-26 per ounce as markets grappled with conflicting signals from persistent inflation and aggressive Federal Reserve tightening. The ongoing Russia-Ukraine conflict continued to support precious metals demand as a safe haven, while China's post-COVID reopening created mixed signals for industrial silver demand. Central bank policy remained the primary driver, with the Fed's pivot toward a more measured pace of rate hikes in Q4 providing tailwinds for non-yielding assets like silver.

2024: Silver markets gained momentum in 2024, breaking above $30 per ounce by mid-year as geopolitical tensions escalated with increased Middle East conflicts and growing US-China trade friction over semiconductor restrictions. The Federal Reserve's first rate cuts since 2020, beginning in Q3, marked a critical inflection point that reduced the opportunity cost of holding precious metals. Industrial demand showed resilience despite global manufacturing headwinds, supported by green energy transition investments.

2025: The silver market entered a new regime in 2025, with prices surging past $35 per ounce amid a perfect storm of supply constraints from major mining regions and explosive industrial demand from AI data centers requiring advanced semiconductors. Geopolitical fragmentation accelerated as the EU imposed broader sanctions on Russian precious metals, while tensions in the Taiwan Strait disrupted global technology supply chains. Central banks globally shifted toward coordinated easing cycles, with the Fed cutting rates below 3% for the first time since the pandemic.

2026: Silver reached multi-decade highs above $40 per ounce in early 2026 before experiencing sharp corrections as markets questioned the sustainability of the rally amid signs of demand destruction in industrial applications. The outbreak of conflict in the South China Sea triggered massive safe-haven flows into precious metals, while simultaneous supply disruptions from sanctions on multiple mining jurisdictions created acute physical shortages. Policy divergence emerged as a key theme, with the Fed pausing its easing cycle due to renewed inflation concerns while other major central banks continued aggressive stimulus.

Signal Performance Overview

2023: The silver strategy demonstrated steady progression throughout the year, with performance accelerating from minimal gains in Q1 to more robust returns by year-end. Risk management remained consistently strong with maximum drawdowns well-contained below 5%, while the strategy maintained disciplined signal generation with win rates hovering in the mid-50s range. The quarterly progression suggests the model adapted well to evolving silver market conditions.

2024: Performance showed continued improvement with stronger annual returns and the strategy demonstrating excellent adaptability across the year's diverse market conditions. Q4 stood out as a particularly strong quarter, while Q3 showed the most muted performance with the lowest Sharpe ratio. The win rate climbed steadily and risk control remained tight throughout.

2025: Silver signals faced a more challenging environment with mixed quarterly performance, including the strategy's only negative quarter in Q3 where risk-adjusted returns turned substantially negative. The year exhibited higher volatility in both performance and risk metrics, with maximum drawdown reaching its peak levels while win rates fluctuated more dramatically between quarters. Despite the mid-year setback, the strategy recovered in Q4, though overall annual performance remained modest compared to other periods.

2026: The silver strategy delivered its strongest annual performance with exceptional risk-adjusted returns, building on particularly robust momentum from Q1 that carried through the year. Signal quality reached peak efficiency with win rates climbing above historical averages while maintaining tight risk control with drawdowns remaining well-managed.

2. Trading Strategy

In order to produce the metrics below we use the signal in combination with the trading strategy below:

• Leverage: No leverage is applied for this strategy and metrics
• Positions:
  • Entry positions: Every 5 minutes (between 09:45 and 15:30 ET) we decide to take a long, short or no position using 1/70 of our starting portfolio for the day (there are 70 possible openings per day). Each long/short position is then split into 5 parts and executed on each minute for the next 5 minutes following the decision. There is no sizing adjustment.
  • Exit positions: We exit all positions at the end of the day. The exits are split over five minutes (15:55–16:00 ET).
• Costs: 3 bp round-turn assumption. Extra exchange/clearing fees not included.
• Contract series & roll: Front-month continuous. Switch at the open T–5 trading days before expiration; stop trading the expiring contract and start trading the next.

For detailed examples, flowcharts, and a full walkthrough of the trading strategy, see Benchmark Trading Strategy.

3. Model Training Data and Timeframe

4. Performance Metrics

Table 1: Quarterly and Annual Metrics

5. Next Steps

Download historical predictions using the Client API and confirm performance in your own test harness.

• Sign-up: Start Free Trial
• API Documentation: https://quantumsignals.ai/documentation

6. Contact

Please reach out with any questions or comments at: info[at]quantumsignals.ai