Victoria Bazir
Silver (XAG) has surged to fresh multi-decade highs this week, with COMEX futures leading the charge and narrowing what had been an unusually wide discount to London spot prices. Traders are now zeroing in on the $50 level as the next major inflection point that could determine the metal's trajectory.
Technical Analysis: Futures Catch Up with Spot
Ole S. Hansen, Head of Commodity Strategy at Saxo Bank, recently highlighted that the silver squeeze shows no signs of letting up. During Asian trading, COMEX December futures jumped 4.75%, cutting into the persistent gap with spot prices. This momentum underscores robust investor appetite and mounting speculation about whether silver can hold above historical resistance levels.
The convergence is striking. Spot silver climbed to $51.58, hitting a new multi-decade peak, while COMEX futures reached $49.48, just shy of last week's high at $49.96 - a threshold many see as pivotal. The futures-spot spread has collapsed to –2.10, its tightest in years, pointing to supply constraints and escalating market tension.
What's Driving the Surge?
Industrial demand continues to grow, with silver playing a vital role in solar panels, electronics, and electric vehicle production. At the same time, inflation worries, geopolitical uncertainty, and shaky confidence in traditional currencies are drawing investors toward safe-haven assets. Speculative traders are piling in too, exploiting the narrowing discount between futures and spot. Meanwhile, physical silver-backed ETFs keep pulling in fresh capital, further squeezing available supply.
Key Levels to Watch
Resistance sits at $49.96 for futures and around $52.00 for spot. The psychological $50.00 mark looms large. On the downside, support appears around $45.00, where prices consolidated previously. A decisive break above $50 futures could open the door to $55–60 in the coming months.
Victoria Bazir
