Silver futures surge on strong industrial demand and supply risks, but overbought conditions suggest cautious buying on pullbacks near support.
Silver continues to add luster as fundamentals are heavily stacked up in favor of the white metal. Called a safe-haven asset, which rises in times of uncertainty, the precious metal also feeds off on the economy's strength, given its industrial application.
Red Hot Streak Continues But How Long? The standard Silver futures (SI) for March delivery (the most active contract), trading on CME Group’s Commodity Exchange (COMEX) climbed over 5% to the $101+ level. Silver futures gained over 140% in 2025, and the rally continues in the new year.
After a broad consolidation move for a long while, silver futures broke out of the range in mid-August. Since then, there has been no looking back.
Chart courtesy of TradingView
Silver’s fundamentals have been robust. More than half of silver demand comes from heavy industry and high technology, including smartphones, tablets, automobile electrical systems, solar panel cells, and many other products and applications, Morgan Stanley said, citing a World Silver Survey. JPMorgan attributes Silver’s outperformance relative to gold to rising industrial demand, its designation as a critical metal by the U.S., and supply shortfalls.
Chart courtesy of TradingView
Silver prices could also find support from supply-side risks, such as a natural gas shortage anticipated in Europe, which in turn will affect silver refining.
Open interest, which refers to the total number of silver futures contract heels by the market participants at the end of Thursday’s trading session, increased sharply for the March contract. The increase in open interest suggests new money flowing in, a positive for the current uptrend. That said, volumes have dropped, a pointer toward possible consolidation.
How To Play the Silver Rally: Recent price action suggests strong momentum for the white metal. That said, the extended run has put silver futures in the overbought zone. It, therefore, pays to trade cautiously, identifying profitable entry points.
As the bullish breakout continues, aggressive traders may look to buy on strength above $100.
More conservative traders can wait for a pullback toward the former resistance-turned-support zone around $98–$99 to accumulate positions.
A sustained move below the $96 support area would invalidate the breakout structure and therefore serves as an appropriate stop-loss level.
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