Silver prices rise to all-time highs, what signals predict a correction?

(NLDO) - The silver market may witness technical corrections after a period of overheating, especially when reverse supply back to London appears.

Over the past week, the price of silver stored in the country has increased sharply. According to giabac.vn of Phu Quy, the selling price of silver has increased to 54.5 million VND/kg, an increase of 6.9% over the past week. This is the highest price in history.

Mr. Nguyen Duc Dung - Deputy General Director of Vietnam Commodity Exchange (MXV)

Speaking with Nguoi Lao Dong Newspaper, Mr. Nguyen Duc Dung - Deputy General Director of the Vietnam Commodity Exchange (MXV), said that the silver market is experiencing one of the strongest and most remarkable price increases in more than a decade.

According to MXV data, world silver prices have increased by more than 70% since the beginning of the year, surpassing the growth rate of gold and many other metals.

Meanwhile, in the domestic market, silver prices also increased by more than 80%. This clearly reflects the trend in the global precious metals market and shows that investment attraction is shifting to silver, not only as a defensive asset, but also as a strategic material in the green economy .

According to Mr. Dung, there are three main factors shaping this upward momentum. First, the US Federal Reserve's (FED) loose monetary policy creates conditions for capital flows to find finite assets such as precious metals.

Second, silver supply and demand are increasingly unbalanced as industrial demand, particularly in solar energy and electric vehicles, grows faster than mining.

Third, the complex geopolitical landscape continues to see silver play a role as a store of value in times of uncertainty.

In the short term, silver prices are also supported by technical factors and physical scarcity in major trading centers such as London. The price difference between London and New York markets has triggered a wave of global physical silver movements to take advantage of the arbitrage opportunity.

In the medium to long term, the current rally is not just a temporary one. Silver is asserting its position as a “dual metal” – both a financial asset and an essential input for the energy transition. As economies push towards carbon neutrality, the outlook for silver remains positive and the market could remain undersupplied until at least 2026.

Silver prices increase sharply, what signals should investors pay attention to?

Notably, MXV Deputy General Director predicted that the silver rally has not ended even though it has passed the strongest breakout phase. In the short term, silver prices may fluctuate in the range of 48 - 55 USD/ounce with an upward trend due to continued tight supply and stable safe-haven flows amid high global risks.

A key factor is that the physical shortage in Europe has not been resolved, with a large portion of silver reserves still held in the US due to concerns about new import tariffs. This has kept the London-New York price differential high, thereby maintaining speculative momentum and supporting prices in the short term.

However, Mr. Dung also said that the market may witness technical corrections after the hot growth period, especially when a group of investors take profits and the supply of transport back to London begins to appear. Such corrections are normal and necessary for prices to form a new, more sustainable level.

Investors also need to closely monitor the policy moves of the US and China, the two largest silver production and consumption centers in the world. If trade tensions escalate, industrial activity may slow down, thereby affecting short-term silver demand.

From an investment perspective, silver is becoming a more reasonable alternative to gold for many individual investors. However, silver's volatility is often larger, due to its small market size and "dual-faced" nature - both an industrial metal and a safe haven asset. Therefore, investors should allocate a reasonable proportion in their commodity portfolio, not considering silver as the only channel but as part of a diversification and risk hedging strategy.

Mr. Dung said that through MXV's interconnected system, investors can access and trade international standard silver in a transparent and legal manner, while using derivatives to protect their positions and optimize investment efficiency during periods of strong market volatility.

Source: https://nld.com.vn/silver-price-increases-to-the-highest-in-history-what-signal-will-the-reform-report-be-196251018093048872.htm