Silver Outlook: Prices pull back from historical highs, bulls take a breather.
2025-12-03 02:08:47
On Tuesday (December 2nd) during the US trading session, spot silver reversed its earlier losses and rose above $58.05, after hitting a low of $56.563 during the day. This rebound indicates that after reaching a record high of $58.819 on Monday, buyers remain actively involved, and the market is currently stabilizing without facing deeper downward pressure.
Commerzbank points out that silver prices recently achieved a breakthrough, briefly climbing to $58.819 per ounce. This level temporarily halted after a sharp 10% gain since Friday, pushing its year-to-date increase to over 100%. Although prices subsequently retreated to around $57, the continued tight supply and low inventory levels on the Shanghai Futures Exchange remain the core factors supporting silver's strong performance this year.
Carsten Fritsch, a commodities analyst at the bank, added that silver has become the best-performing commodity of the year among all the commodities it tracks – silver prices broke through the all-time high set in mid-October last Friday, triggering a new round of strong gains until pausing yesterday at $58.819.
Profit-taking subsided, and buyers re-entered the market.
The early morning pullback was primarily driven by profit-taking following Monday's sharp rise, a natural reaction to the rapid price increase. The 10-year US Treasury yield held steady around 4.114%, putting initial pressure on silver prices by increasing the opportunity cost of holding precious metals. However, the price rebound to positive territory indicates that bargain hunters are still prepared to absorb selling pressure, especially given the positive long-term fundamentals.
Silver continues to benefit from multiple positive factors: demand linked to the gold bull market, a structural physical supply gap, and expectations of its inclusion in the U.S. critical minerals list. These factors support substantial potential buying interest, ensuring continued active participation from investors even when market momentum temporarily cools.
It's worth noting that the recent surge in silver prices has not seen any new driving factors; the aforementioned tight supply situation (low inventories on the Shanghai Futures Exchange) remains the core logic. There were rumors that US President Trump might impose tariffs on silver because the US Geological Survey (USGS) had added it to its list of critical minerals. However, this event actually occurred a month ago, which doesn't align with the timing of this price increase, making it unlikely to be a direct contributing factor. Furthermore, silver inventories on the New York Mercantile Exchange (Comex) have not shown significant changes to date, further confirming that the tariff rumors are not the primary cause of this round of price increases.
Federal Reserve policy expectations influence market sentiment.
Traders are preparing for the Federal Reserve's December 9-10 meeting, with current currency market pricing indicating an 87% probability of a 25-basis-point rate cut—a significant shift from 35% two weeks ago. Lower interest rates typically reduce the attractiveness of interest-bearing assets, thus boosting precious metals.
This week, the US will release several key data points: ADP employment data, initial jobless claims, and the delayed September core PCE report, all of which are of significant reference value. The latest ISM Manufacturing PMI confirms that the industry remains in contraction, while rumors that Kevin Hassett is a potential candidate for Federal Reserve Chairman continue to draw market attention.
Technical Analysis
(4-hour chart of spot silver source: EasyForex)
The current core trend logic for spot silver is a bullish market driven by the bat harmonic pattern, with technical and fundamental factors resonating, presenting an overall rhythm of "mainly upward movement with pullbacks as a supplement."
From a morphological perspective, this is a complete and precisely proportioned bat pattern: the initial trend segment is the decline from point X (54.436) to point A. The retracement ratio from A to B reaches 0.623 (fitting the classic range of 0.618), confirming the rebound. The retracement ratio from B to C is 1.227 (within the rule range of 1.000-1.272), achieving a second verification of the trend. The upward segment from C to D extends to 2.658 times XA (covering the target range of 1.618-2.618), simultaneously touching the 1.891 extension level. Point D (58.819) becomes the stage peak. The bullish driving attribute of the entire pattern is clear and effective.
The support from the moving average system further strengthens the trend: the EXPMA multi-periods are in a bullish alignment, the 20-period moving average (55.265) is right below the price, forming immediate support, the 50-period moving average (54.175), the 100-period moving average (52.586) coincide with point B of the pattern and the 1.000-fold extension of segment XA, forming a double support zone of "pattern + moving average", and the 200-period moving average (50.830) is a solid anchor point for the trend, with a very low risk of a short-term breakdown.
In terms of momentum, the current RSI (14) value is 67.468, which is in the strong zone (50-80) but not overbought. Moreover, the trend is moving upward in sync with the price and there is no top divergence signal, which verifies the health and sustainability of the bullish momentum.
The key levels are clearly defined: on the resistance side, in order of impact, are the 1.786x extension level of the XA segment (58.256, short-term stage pressure), the 2.000x extension level (59.322, core upward target), and the 2.618x extension level (extreme range of the pattern); on the support side, the core levels are the 1.618x extension level of the XA segment (57.420, short-term defense line), the range corresponding to point B (55.517, pattern structure support), and the 1.000x extension level of the XA segment (54.342, medium-term anchor point).
In summary, the short-term trend is mainly focused on pushing towards 59.322. If it pulls back to 57.420 and recovers, the bullish trend will continue. In the medium term, if it breaks through 59.322, it is expected to extend to new highs. Only if it falls below 55.517 should the bullish expectations be adjusted.
Commerzbank points out that silver prices recently achieved a breakthrough, briefly climbing to $58.819 per ounce. This level temporarily halted after a sharp 10% gain since Friday, pushing its year-to-date increase to over 100%. Although prices subsequently retreated to around $57, the continued tight supply and low inventory levels on the Shanghai Futures Exchange remain the core factors supporting silver's strong performance this year.
Carsten Fritsch, a commodities analyst at the bank, added that silver has become the best-performing commodity of the year among all the commodities it tracks – silver prices broke through the all-time high set in mid-October last Friday, triggering a new round of strong gains until pausing yesterday at $58.819.
Profit-taking subsided, and buyers re-entered the market.
The early morning pullback was primarily driven by profit-taking following Monday's sharp rise, a natural reaction to the rapid price increase. The 10-year US Treasury yield held steady around 4.114%, putting initial pressure on silver prices by increasing the opportunity cost of holding precious metals. However, the price rebound to positive territory indicates that bargain hunters are still prepared to absorb selling pressure, especially given the positive long-term fundamentals.
Silver continues to benefit from multiple positive factors: demand linked to the gold bull market, a structural physical supply gap, and expectations of its inclusion in the U.S. critical minerals list. These factors support substantial potential buying interest, ensuring continued active participation from investors even when market momentum temporarily cools.
It's worth noting that the recent surge in silver prices has not seen any new driving factors; the aforementioned tight supply situation (low inventories on the Shanghai Futures Exchange) remains the core logic. There were rumors that US President Trump might impose tariffs on silver because the US Geological Survey (USGS) had added it to its list of critical minerals. However, this event actually occurred a month ago, which doesn't align with the timing of this price increase, making it unlikely to be a direct contributing factor. Furthermore, silver inventories on the New York Mercantile Exchange (Comex) have not shown significant changes to date, further confirming that the tariff rumors are not the primary cause of this round of price increases.
Federal Reserve policy expectations influence market sentiment.
Traders are preparing for the Federal Reserve's December 9-10 meeting, with current currency market pricing indicating an 87% probability of a 25-basis-point rate cut—a significant shift from 35% two weeks ago. Lower interest rates typically reduce the attractiveness of interest-bearing assets, thus boosting precious metals.
This week, the US will release several key data points: ADP employment data, initial jobless claims, and the delayed September core PCE report, all of which are of significant reference value. The latest ISM Manufacturing PMI confirms that the industry remains in contraction, while rumors that Kevin Hassett is a potential candidate for Federal Reserve Chairman continue to draw market attention.
Technical Analysis
(4-hour chart of spot silver source: EasyForex)
The current core trend logic for spot silver is a bullish market driven by the bat harmonic pattern, with technical and fundamental factors resonating, presenting an overall rhythm of "mainly upward movement with pullbacks as a supplement."
From a morphological perspective, this is a complete and precisely proportioned bat pattern: the initial trend segment is the decline from point X (54.436) to point A. The retracement ratio from A to B reaches 0.623 (fitting the classic range of 0.618), confirming the rebound. The retracement ratio from B to C is 1.227 (within the rule range of 1.000-1.272), achieving a second verification of the trend. The upward segment from C to D extends to 2.658 times XA (covering the target range of 1.618-2.618), simultaneously touching the 1.891 extension level. Point D (58.819) becomes the stage peak. The bullish driving attribute of the entire pattern is clear and effective.
The support from the moving average system further strengthens the trend: the EXPMA multi-periods are in a bullish alignment, the 20-period moving average (55.265) is right below the price, forming immediate support, the 50-period moving average (54.175), the 100-period moving average (52.586) coincide with point B of the pattern and the 1.000-fold extension of segment XA, forming a double support zone of "pattern + moving average", and the 200-period moving average (50.830) is a solid anchor point for the trend, with a very low risk of a short-term breakdown.
In terms of momentum, the current RSI (14) value is 67.468, which is in the strong zone (50-80) but not overbought. Moreover, the trend is moving upward in sync with the price and there is no top divergence signal, which verifies the health and sustainability of the bullish momentum.
The key levels are clearly defined: on the resistance side, in order of impact, are the 1.786x extension level of the XA segment (58.256, short-term stage pressure), the 2.000x extension level (59.322, core upward target), and the 2.618x extension level (extreme range of the pattern); on the support side, the core levels are the 1.618x extension level of the XA segment (57.420, short-term defense line), the range corresponding to point B (55.517, pattern structure support), and the 1.000x extension level of the XA segment (54.342, medium-term anchor point).
In summary, the short-term trend is mainly focused on pushing towards 59.322. If it pulls back to 57.420 and recovers, the bullish trend will continue. In the medium term, if it breaks through 59.322, it is expected to extend to new highs. Only if it falls below 55.517 should the bullish expectations be adjusted.
- Risk Warning and Disclaimer
- The market involves risk, and trading may not be suitable for all investors. This article is for reference only and does not constitute personal investment advice, nor does it take into account certain users’ specific investment objectives, financial situation, or other needs. Any investment decisions made based on this information are at your own risk.
