Following the spread of panic in overseas markets overnight, silver has once again faced a rapid sell-off. London silver plummeted by nearly 10% within just a few hours, while the main Shanghai silver contract opened with a steep gap down of over 17%, clearly highlighting the market's fragility and extreme sentiment transmission.
Recent Market Logic: The sharp decline in the main Shanghai silver futures contract can be viewed as a "panic relay" triggered by overseas markets. It began with a significant drop in European and U.S. technology stocks, particularly due to massive AI capital expenditure plans announced by giants like Amazon. Although these plans are forward-looking, market concerns about their severe impact on short-term corporate profits led to a collective downward revision of tech stock valuations and a sharp decline in risk appetite.
This pessimistic sentiment quickly spread to the cryptocurrency market, which is also considered a high-risk speculative asset. U.S. Treasury Secretary's clear stance of "no intervention, no market rescue" effectively removed the perceived "safety net," shattering investor illusions and triggering a sharp fall in Bitcoin, along with forced liquidations of highly leveraged contracts.
Finally, the shockwave reached the silver market. Silver itself is highly speculative and exhibits much greater volatility than gold. After experiencing a historic decline not long ago, market sentiment remains fragile, with a very slow recovery process. Therefore, when panic from the bursting of the two major "bubbles"—tech stocks and Bitcoin—struck, unsettled funds chose to flee this high-risk sector first, becoming one of the driving factors behind the continued downward correction in Shanghai silver prices. In short, recent events have demonstrated a chain of panic transmission from tech stocks to Bitcoin, and finally to silver.
Analyst Perspective: The main Shanghai silver contract Ag2604 has broken below a key technical support zone, specifically the 0.382 Fibonacci retracement level near the 20,000–20,200 integer mark. After a rebound following the breakdown, the price faced renewed pressure in this area, preliminarily confirming that the former support has likely turned into a key resistance level. If the price fails to recover above this zone in the short term, there is a risk of further weakening sentiment and a search for lower support levels. Key structural support below can be referenced at the starting point of this rally, near the opening price of 12,650 on December 1, while the 18,000 integer level should also be monitored in the near term.
The current silver market is highly volatile and not yet fully stabilized, with prices driven by sentiment and capital flows, resulting in extreme uncertainty. Investors are advised to observe more and act less, strictly control positions and risks, respond rationally to fluctuations, and avoid blindly chasing rallies or selling in panic.
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