Selling silver down to $82.70 if bubble bursts

The silver market is now in a unique situation that many analysts refer to as a “rational bubble”. Powerful upward momentum is currently triggering severe volatility and turmoil. In general, present conditions can be described by three key factors: clear signs of an emerging bubble, solid growth fundamentals, and a risky outlook for 2026. Let’s break them down one by one.

1. Signs of a bubble:

Demand frenzy. At the beginning of 2026, a rise in inflows from private investors is being seen. They are actively purchasing silver as a cheaper alternative to gold amid growing inflation expectations and the instability of fiat currencies.

Imbalanced gold-silver ratio. The figure has recently dropped below 75:1, indicating that the market will be overheated in the short term.

Speculative capital. Higher prices are being fueled by algorithmic trading and social media activity (similar to trends seen over past years), which creates an artificial supply shortage on exchanges.

2. Growth fundamentals (or why this bubble is more rational than the classic ones):

Unlike other bubbles, the current one is supported by a strong industrial base for silver.

Green energy. The mass production of new-generation solar panels (TOPCon and HJT), which use more of the metal than ever before, is pushing demand beyond historical records.

Electric vehicles. Corporate demand for silver in power electronics and charging infrastructure surged by over 20% in 2025–2026. 

Supply deficit. Global output has lagged behind consumption levels for four consecutive years. On-land reserves in London (LBMA) and New York (COMEX) storage facilities are critically low.

3. Risks of a bubble burst in 2026:

Geopolitical de-escalation. If tensions in the Middle East ease, the risk premium for the precious metal will dissolve.

China’s economic slowdown. The world’s second-largest economy is the top silver consumer. Signs of stagnation in the country’s tech sector could trigger a price slump to $26–$28.

Fed’s monetary policy. Expectations of a pause in the Federal Reserve’s rate-cutting cycle are getting louder, painting a dim picture for non-yielding assets like silver.

Assuming a bubble burst in the metal market is imminent, the floor and most likely target for bears would be $82.70.

The overall recommendation is to sell silver. Lock in profits at $82.70. Set Stop Loss at $95.00.

The volume of the open position should be calculated so that the potential loss (protected by a Stop Loss order) does not exceed 1% of your deposit. If your account balance does not allow opening such a position, it is better to avoid entering the market on this signal and wait for other trade options that meet low-risk criteria.