Escalating geopolitical tensions save silver from correction

Silver conquered new heights at the beginning of this week, with prices jumping above $94 per ounce. Such a surge was triggered by escalating trade and geopolitical tensions between the United States and a number of major European countries. The Trump administration appears ready to introduce 10% import tariffs for Germany, France, the United Kingdom, and a few others. Corresponding statements made on January 18 cast doubts on the future of transatlantic relations, bolstering capital inflows into safe-haven assets.

However, it is important to keep a cool head, as market conditions have already been overheated before the recent jump. Last week, the risk of duties on critical minerals—one of the key drivers for the rally—temporarily eased after the US administration decided to postpone them. This was followed by a first wave of profit-taking. In addition, Chinese regulators began restricting high-frequency trading on commodity exchanges. This environment cooled the speculative frenzy that had previously driven prices higher.

Despite hitting all-time peaks, the market is clearly overheated. Retail investors have actively built up their positions recently, while dealers have seen record sales of the physical metal. Structural supply shortages and silver’s key role in green energy remain long-term tailwinds, but current growth rates appear unsustainable. The market dynamic could shift significantly if geopolitical tensions subside.

The technical setup confirms that quotes are on shaky grounds after surging to new historical highs. The current uptrend is screaming for a pause, with the Stochastic Indicator deep in overbought territory, suggesting that the asset is overpriced and could correct in the near term. The Chaikin Oscillator, while still issuing a “Strong Buy” signal, is declining, indicating that bullish momentum is waning. The recent uptick appears exaggerated, so it may not last long, especially if geopolitical turmoil fades or diplomatic efforts are initiated.

Keep in mind the following trading strategy:

Sell silver at the current price. Place Take profit 1 at $86.910, Take profit 2 at $83.560 and Stop loss at $98.900.

The forecast is valid from January 19 till January 26, 2026.