Extreme fanaticism? Silver once soared 14% to nearly $118, but has since fallen back to less than 1%

# Source: Wall Street Insights

By Zhao Yuhe & Ye Zhen

Silver skyrocketed 14% intraday to a record high of $118 in New York trading before retreating, erasing nearly all gains and closing with a mere 1% rise. Data shows that volatility indicators have surged to 106, with the market pricing in daily fluctuations of around 7%—a trading pattern more extreme than that of meme stocks. Trading volume of silver ETFs hit a record high, and technical charts formed a "shooting star" top signal. Analysts warn that this parabolic rally exhibits characteristics of a "blow-off top", suggesting the speculative phase may have come to an end.

Silver touched an all-time high near $118 in midday New York trading, then quickly gave back its gains. Analysts opine that the momentum of this parabolic surge in silver has clearly shown signs of fatigue, with price movements increasingly resembling a "blow-off top".

On Monday (Eastern Time), silver prices trended higher since the start of the Asian trading session. At 02:03 Beijing Time, it hit an intraday record high of $117.7132, surging as much as 14%—marking the largest single-day gain since 2008.

But the subsequent pullback was abrupt: shortly after the US stock market closed on Monday, silver erased nearly all of its intraday gains, followed by only a very limited rebound, ending the day with a gain of less than 1%.

COMEX silver futures closed 1.45% higher at $102.790 per ounce, having touched an intraday record high of $117.700 at 02:03 before paring gains.

Media analysis notes that this clearly reflects that after days of momentum-driven, bullish sentiment-fueled rally, the upward trend has become extremely fragile. This sharp pullback raises the risk that the speculative phase of this rally may have temporarily concluded. Nevertheless, against the broader backdrop, a weakening US dollar and escalating geopolitical tensions continue to provide overall support for precious metals.

## Uncontrolled Volatility and Panic Buying

Data indicates that the silver market is currently more frenzied than meme stocks, with volatility now in a state of "complete disarray".

According to LSEG Workspace data, eager investors and short sellers are panic-buying call options on implied volatility. The silver volatility index VXSLSLV is hovering around 106, having hit an intraday high of 124—meaning the market is pricing in daily price swings of approximately 7%. Such a volatility level is already extreme for meme stocks, and unprecedented for a hard asset like silver.

In terms of price action, silver is behaving more like a meme stock than a "serious" hard asset. While some market views argue that this rally is fundamentally driven and technical analysis is no longer applicable, the extreme signals shown on technical charts still warrant attention.

LSEG Workspace data reveals that silver's deviation from its 21-day moving average and its distance from the 50-day moving average have both reached extreme levels not seen in a long time. Such an overextended technical pattern is extremely rare in the hard asset market.

Trading volume of the iShares Silver Trust (SLV) hit a record high on Monday, as panic buying capital flooded the market. Technical charts show that silver formed a massive "shooting star" candlestick pattern on record volume—a formation typically regarded as a top signal.

According to charts from Bloomberg's Michael McDonough, the cumulative return of the current silver bull market has completely surpassed any cycle in the past half-century.

In the previous two major bull cycles, the cumulative returns by the 6th year stood at 145% (1970s) and 40% (2000s), respectively. In contrast, the cumulative return of silver since the 2020s has soared to as high as 520%. This data indicates that the silver market in this decade is not merely a repeat of history, but has entered an entirely different league, with explosive momentum far exceeding any previous period.

Amid the sharp fluctuations in silver prices, the gold/silver ratio has dropped to the 46 level. This ratio is entering a critical historical range, and is generally regarded as an important indicator for measuring the relative valuation of precious metals. The rapid contraction of the gold/silver ratio reflects that silver has significantly outperformed gold in this round of precious metals rally.

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