Silver reaches new highs amid signs of overheated market

Silver continued its ascent on Monday, reaching a new all-time high of $69.433. Despite the clear bullish sentiment, the current technical setup suggests a potential short-term correction after such a powerful rally.

The price is now moving along the upper Bollinger Band ($68.805), a typical sign of strong upward momentum. However, this dynamic also indicates extremely overheated conditions. The expansion of the bands confirms that market players are hyperactive; it is especially true for buyers. The Stochastic lines (%K=74, %D=72) are hovering near overbought territory. At the same time, the Chaikin Oscillator is pointing to a noticeable slowdown in capital inflows, despite persistent price growth. This divergence between quotes and momentum indicators could precede a consolidation phase.

Meanwhile, fundamentals continue to support silver in the medium run, with expectations of further monetary easing by the Federal Reserve (Fed) being a key driver. As a non-yielding asset, the metal is becoming increasingly attractive for investors, who predict two more rate cuts in 2026. Rising industrial demand also underpins silver. The sector is thriving due to massive investments in artificial intelligence (AI) technologies and renewable energy. The asset is of particular interest in Asia, as the region is facing a significant deficit following substantial outflows from inventories.

The technical picture aligns with fundamental factors, signaling silver’s potential to set new highs after the corrective movement ends. Quotes’ position near the upper Bollinger Band and the Chaikin Oscillator’s reading both suggest a slight retreat followed by a resumed uptrend.

Take a look at the trading strategy down below:

Buy silver on pullbacks near $65.540. It is better to wait for a correction before entering a new deal, as the current uptrend appears to be strong but overheated. Place Take profit at $72.00 and Stop loss at $62.80.

This forecast remains relevant between December 22 and December 31, 2025.