First Majestic Silver Corp. (AG) shares slipped Monday as the precious metals sector took a breather following silver's dramatic pullback from record highs. But what's really happening here goes beyond a simple down day.
The Silver Squeeze
The iShares Silver Trust (SLV) hit fresh all-time highs in pre-market trading Monday as silver prices rocketed above $82 per ounce before cooling off later in the session. That retreat dragged silver miners like First Majestic along for the ride.
Silver's recent surge isn't just speculative fever. There's a genuine physical shortage unfolding in China, where a wave of retail buying has crashed into already tight supply. The situation got so intense that UBS SDIC Silver Futures Fund LOF, China's only pure silver fund, had to halt new subscriptions on Friday after its market price soared to more than a 60% premium over its underlying assets. That's not normal.
Adding fuel to the fire, China's move to restrict silver exports is raising concerns that global supply chains could face disruptions, potentially pushing prices even higher. Analysts point to structural deficits and robust industrial demand from solar and EV manufacturing as reasons silver could climb toward the $85 to $100 range.
The Technical Picture
Despite Monday's decline, First Majestic Silver is showing a strong bullish setup. The stock trades 4.9% above its 20-day simple moving average, 21.8% above its 50-day, and a remarkable 74.1% above its 200-day, signaling solid upward momentum.
The RSI sits at 66.57, neutral but approaching overbought territory. That means the stock has momentum, but traders should watch for potential pullbacks if RSI crosses above 70. Meanwhile, MACD remains above its signal line, suggesting the bullish trend could continue.
Key support is at $14.50, while resistance sits at $17.50. A break above resistance could signal further gains, while dropping below support might indicate a trend reversal. Over the past year, AG has surged 213.17%, highlighting remarkable resilience and growth potential.
Price Action
First Majestic Silver shares were down 3.79% at $16.75 at the time of publication Monday, trading near its 52-week high of $17.91.
