Silver's rally has recently pushed ahead at full throttle, just as anticipated. Not only did the metal breach the $70 threshold for the first time last week, it also skyrocketed to $85 per ounce in today's early session. While the fundamental drivers for appreciation are real, the current surge is shaping up to be a textbook fear-of-missing-out (FOMO) blowoff. The higher it climbs now, the harder it will fall once the rally ends.
Signs of profit-taking are emerging in plain sight. Today's more-than-12% drop in just two hours underscores the white-knuckle volatility now gripping the market. Technical indicators are deep in overbought territory, with prices stretched far beyond the 50-day moving average and its monthly uptrend line. Logical targets for a pullback are the 23.6% ($76.8) and 38.2% ($71.4) Fibonacci retracement levels, though a dip to these zones wouldn't necessarily rule out another leg higher down the road.
Bulls took heart from the news that China will clamp down on silver exports from January 1, requiring a license for overseas shipments—a move clearly aimed at stemming the heavy flow of metal to London. Yet, TD Securities data reveal that over 212 million ounces have already landed in UK vaults since October, suggesting that the worst of the supply crunch may be over.
Analysts remain optimistic about the next year. Still, a repeat of the 175% surge seen in 2025 seems unlikely. BMO Capital Markets expects a fair-value band of $55–$60, and Sprott Asset Management advises waiting for a pullback to the $60–$63 range before going long again. At current nosebleed levels, buying silver looks less like an investment and more like a speculative roll of the dice.
Pay attention to the trading strategy down below:
Sell silver at the current price. Place Take profit 1 at $76.8, Take profit 2 at $71.4, and Stop loss at $85.3.
This content is for informational purposes only and is not intended to be investing advice.
