Silver is up 9% or $9.20 to $112, which is a fresh all-time high.
Note that it just broke $100 for the first time on Friday and it’s gone straight through the big figure in an incredible parabolic move. This is one for the history books as silver has now doubled since December 15.
What else is there to say aside from the chart? You don’t see moves like this very often in commodity markets, as silver has turned into a meme. The Hunt Brothers did this 50 years ago with an epic short squeeze that ended with higher margin requirements.
We’re likely to see margin levels changed again this week but we’ve seen that recently and it didn’t stop the rally. Retail traders are pouring in and there is an evident (but relatively small) deficit in the physical market.
This is obviously a mania and something of a blow-off top. The thing is, the final stages of moves like this can often be the most-dramatic. A $9/oz move in a single day is borderline insane in a market that was at $30 less than a year ago and at $12 during the pandemic.
It’s an absolute bonanza for silver miners, who have to be thinking about selling some forward production into the futures market. That could add some selling pressure but the silver bugs are special breed who have long-believed this day was coming. Congratulations to them as this is a moment to savour.
Gold is along for the ride but at a much slower pace. It’s up 2.2% today to $5092 after briefly rising above $5100 earlier. It broke $5000 for the first time in Asia-Pacific trading.
Silver is a much smaller market and that lower liquidity is a big factor in why it’s running up so quickly. Ultimately that will be a double-sided factor but right now it’s an unstoppable machine. Tagging $100 was a big test of the potential for profit taking but instead it’s set off an incredible squeeze higher.
This article was written by Adam Button at investinglive.com.