On Friday (December 12th) during the US trading session, spot silver suddenly plunged over 4% from a high of around 64.5, breaking through the lower edge of the trading range. It then quickly stabilized at the support level of 61.00-61.25 and rebounded slightly to around 61.6. It traded at $61.611 per ounce during the session, a drop of 3.04%. Silver has now risen approximately 10% in a single week, and this surge has pushed silver prices more than double from their levels at the beginning of the year.



Strong industrial demand and depleted inventory have become the core drivers of this round of price increases.

The core driver of this strong silver rally lies in persistently robust industrial demand and continuously shrinking inventory levels. Silver consumption in the electronics, photovoltaic, and high-end manufacturing sectors continues to climb, while the growth rate of mineral supply has consistently failed to keep pace with demand growth.

This supply-demand imbalance has kept the silver market in a tight supply for a long time, leading to a consensus that even at the current high price range, the available supply of silver remains limited. Meanwhile, silver's inclusion in the U.S. Critical Minerals List further highlights its strategic value, adding further policy-driven demand to an already pressured supply side.

High retail investor speculation coupled with ETF inflows accelerated the rise in silver prices.

Besides fundamental factors, speculative activity has been a key force driving the rapid rise in silver prices. Retail investor participation has increased significantly, leading to substantial inflows into silver ETFs.

The continued influx of funds further amplified the upward momentum of silver prices, creating a positive cycle of "price increases attracting new buy orders" rather than triggering a sell-off. The lack of selling pressure above encouraged traders to maintain long positions, while investors who were on the sidelines dared not easily go short against the trend, fearing they would miss out on this sustained bull market.

With no selling pressure above, the market is driven by trend momentum.

From a market structure perspective, there is currently no clear resistance level suppressing silver prices. The recent short-term price fluctuation range for silver is $56.46-$64.58, and the moving average has moved up to $60.50, which directly reflects the rapid pace of silver price increases.

With no clear price reference points above, traders can only rely on market momentum, volume, and order flow changes to determine whether sellers will eventually enter the market and dominate the trend. Although the market is currently showing signs of being overbought, the main upward trend remains unchanged. Any pullback in the short term is more likely a result of profit-taking and a temporary pause for the bulls, rather than a signal of a reversal in the overall market trend.

Short-term outlook: The bullish tone remains unchanged, but the risk of a pullback has increased.


(Spot silver 1-hour chart source: EasyTrade)

Silver prices are expected to maintain a strong bullish trend in the short term. Tight supply, robust industrial demand, and continued inflows of speculative funds are all supporting higher silver prices.

Silver prices have risen too much in the short term, and the market is entering a correction phase as traders take profits and wait for better entry points. Until clear signals of weakening demand or easing supply pressures emerge, any pullback is more likely to be seen as a short-term adjustment within a bull market rather than the start of a sustained downtrend.