Technically, the main trend is up with no objective at this time. We should find out early in the week if Friday’s buying was real or just speculators taking advantage of a thin post-holiday market. The first line of defense will be the pair of tops at $54.49 to $54.39 since we all know that “old tops can become new bottoms.”
If the first support fails then the pullback may extend into $51.04 as part of a normal retracement. The main trend will remain up as long as the swing bottom at $45.55 holds, while moving average traders will tell us that the 52-week moving average at $37.27 is controlling the trend.
The Fed Tailwind
Rate-cut expectations drove a lot of this move. By Friday, traders had priced in nearly 90% odds of a December cut, up sharply from the week before. Fed officials, including Christopher Waller and John Williams, reinforced the dovish narrative. For a non-yielding asset like silver, that math works: lower rates shrink the opportunity cost of holding metal instead of bonds.
Supply Deficits Are Real
The structural story keeps getting tighter. The silver market has run a cumulative deficit of 678 million ounces over the past four years—equivalent to 10 months of global mine production. Industrial demand hit a record 680.5 million ounces in 2024, and 2025 is on pace to extend that streak.
Solar panels now account for roughly 14% of total silver demand, up from 5% a decade ago, and newer cell technologies like TOPCon require 50% more silver per gigawatt than older designs. Electric vehicles add another layer, using about twice as much silver as traditional cars.
London Vaults Under Pressure
Physical tightness showed up in the vaults. London Bullion Market Association holdings have dropped by roughly a third since mid-2022, falling to their lowest levels in years. Earlier this fall, overnight borrowing costs spiked to 200% annualized as traders scrambled to close positions. That’s not the kind of stress you see in a balanced market.
