To The Moon

Yesterday, silver surged by as much as 14%, soaring past the $117 mark!

However, the rally proved short-lived as silver plunged sharply during the session, with gains narrowing from 14% to less than 1%, leaving behind a long upper shadow!

Silver-related ETFs also experienced massive volatility: $iShares Silver Trust(SLV)$ narrowed its gains from over 14% to 5.8%, $ProShares Ultra Silver(AGQ)$ retreated from nearly 30% to 9.7%, $Global X Silver Miners ETF(SIL)$ fell from over 6% to 0.4%, and $Amplify Junior Silver Miners ETF(SILJ)$ even dropped 1%:

In technical analysis, a long upper shadow forming at elevated levels often signals a top formation. Silver's gains narrowed significantly overnight, raising concerns about sharp market divergence—a silver top is now evident!

Yet the market underestimated the intensity of investor fervor. Silver surged again today, climbing over 9% intraday and poised to recapture yesterday's losses:

Amidst sharp volatility, is silver nearing its peak?

From the gold-silver ratio perspective, the current level stands at 45.3%, near multi-year lows, though it has yet to surpass the record low of 32 times seen in 2011:

Fundamentally speaking, it's not just silver that's surging—gold is too. Yesterday, gold prices broke through $5,111 per ounce, with an astonishing rate of increase.

The surge in precious metal prices stems primarily from U.S. President Trump's frequent threats of tariffs. After warning Canada of a 100% tariff hike, he yesterday threatened to raise tariffs on South Korea from 15% to 25%!

These repeated sanctions have severely disrupted global order, causing the U.S. dollar to depreciate. The Bloomberg Dollar Index has fallen to its lowest level in five years:

Beyond the so-called “debasement trade,” silver demand itself has been exceptionally strong. James Emmett, CEO of MKS PAMP SA, said: “Silver demand is enormous — at levels we have never seen before.”

Demand from the Chinese market has been a key driver of this rally. On Tuesday, silver futures for February delivery on the Shanghai market rose 3% to 28,178 yuan per kilogram. Converted using the onshore renminbi exchange rate, this is equivalent to $125.95 per ounce, far above the intraday high of $113 in the international spot silver market.

For most of last year’s silver surge, prices in Shanghai largely tracked international spot and New York futures. However, since late December, Chinese futures prices have begun to trade at a clear premium.

Although tight supply-demand dynamics and geopolitical tensions have fueled this unprecedented bull run in precious metals, silver's trading volume—only one-fifth that of gold—naturally makes it more susceptible to speculative trading.

Therefore, does the emergence of long upper shadows signal that silver has become overbought? Even if the long-term fundamentals remain sound, does this significantly increase the likelihood of a near-term correction? We welcome your comments below—valuable insights will be rewarded with 30-100 Tiger Coins!

Silver-related ETFs:

$iShares Silver Trust(SLV)$ : The largest silver ETF, with a management fee of 0.5%, has gained over 52% year-to-date, tracking silver's price movements;

$Abrdn Silver ETF Trust(SIVR)$ : Second only to SLV in size, but with a management fee of just 0.3%, it has also gained over 52% year-to-date, tracking silver's price movements;

$Global X Silver Miners ETF(SIL)$ : A silver mining ETF with a slightly higher management fee of 0.65%, it has gained 34% year-to-date, underperforming silver;

$ProShares Ultra Silver(AGQ)$ : A leveraged ETF amplifying silver's price movements by 2x, with a high management fee of 0.95%, but a substantial year-to-date gain of 126%;

$Proshares Ultrashort Silver(ZSL)$ : A 2x inverse silver ETF, experiencing significant year-to-date losses, with a management fee of 0.29%, suitable for positioning during silver downturns.