Silver’s historic surge hits a wall as volatility explodes

Record highs give way to a clean uptrend break
Selling accelerates despite strong macro tailwinds
Heavy retail involvement likely behind the wild volatility

After an epic four‑day percentage gain not seen since 2008, the bullish trend in silver is looking shaky with the price slicing through uptrend support running from the January 9 lows, delivering upon the three‑candle bearish reversal pattern that printed on the hourlies and bearish divergence with RSI (14) beforehand.

The uptrend break delivered an initial powerful downside move, seeing the price plunge to support at $86.24 before bouncing back towards $89.15. The latter has seen plenty of action over recent days, providing a level to set trades around depending on how the near‑term price action evolves.

Source: TradingView

If the bullish trend is over with the price unable to push back above $89.15 towards the uptrend, shorts could be established beneath the level with a tight stop above for protection, targeting $89.24 support initially. If that were to be broken, downside levels to watch include $84.60, $83.67 and $82.76 given each acted as support and resistance for short periods during the bullish move. $80.50 and $79 should also be on the radar if the unwind really gets a wriggle on.

However, as we’ve seen many times before this breakdown, bearish moves don’t often last long in silver, so another torrent of dip‑buying cannot be ruled out. If the bulls step in and bid the price back above $89.15, it would open the door for fresh longs to be set, targeting the former uptrend initially with $92 and record high of $93.61 additional options after that.

Even though I’m putting little weight on the mixed messaging from RSI (14) and MACD when it comes to directional risks, there was bearish divergence between the former and price before the plunge, providing an early warning sign that strength behind the bullish move was fading. That’s something to make note of regardless of what direction of travel silver chooses to go next.

From time to time, StoneX Financial Pty Ltd (“we”, “our”) website may contain links to other sites and/or resources provided by third parties. These links and/or resources are provided for your information only and we have no control over the contents of those materials, and in no way endorse their content. Any analysis, opinion, commentary or research-based material on our website is for information and educational purposes only and is not, in any circumstances, intended to be an offer, recommendation or solicitation to buy or sell. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. No representation or warranty is made, express or implied, that the materials on our website are complete or accurate. We are not under any obligation to update any such material.

As such, we (and/or our associated companies) will not be responsible or liable for any loss or damage incurred by you or any third party arising out of, or in connection with, any use of the information on our website (other than with regards to any duty or liability that we are unable to limit or exclude by law or under the applicable regulatory system) and any such liability is hereby expressly disclaimed.

FOREX.com is a trading name of StoneX Financial Pty Ltd.

The material provided herein is general in nature and does not take into account your objectives, financial situation or needs.

While every care has been taken in preparing this material, we do not provide any representation or warranty (express or implied) with respect to its completeness or accuracy. This is not an invitation or an offer to invest nor is it a recommendation to buy or sell investments.

StoneX recommends you to seek independent financial and legal advice before making any financial investment decision. Trading CFDs and FX on margin carries a higher level of risk, and may not be suitable for all investors. The possibility exists that you could lose more than your initial investment and CFD investors do not own or have any rights to the underlying assets.

It is important you consider our Financial Services Guide and Product Disclosure Statement (PDS) available at www.forex.com/en-au/terms-and-policies/, before deciding to acquire or hold our products. As a part of our market risk management, we may take the opposite side of your trade. Our Target Market Determination (TMD) is also available at www.forex.com/en-au/terms-and-policies/.

StoneX Financial Pty Ltd, Suite 42.01, 264 George Street, Sydney, NSW 2000 (ACN 141 774 727, AFSL 345646) is the CFD issuer and our products are traded off exchange.

Delayed London Stock Exchange (LSE) Data

The London Stock Exchange (LSE) market data displayed or referenced on this website is provided on a delayed basis and is not in real time. The delay period may vary but is typically at least 15 minutes. This data is intended for information purposes only and should not be relied upon for trading, investment, or other financial decisions. We do not guarantee the completeness, reliability, or suitability of the data for any particular purpose. Users should consult real-time data sources and obtain professional advice before making any financial decisions.