The iShares Silver Trust (SLV) is trading higher Tuesday, clawing back a chunk of the brutal losses that hammered the silver ETF at the start of the week. The recovery mirrors what's happening in spot silver, which is up nearly 4% and trading in the mid-$70s per ounce after Monday's whiplash reversal from record highs above $82.
The Chinese Frenzy Behind the Madness
Monday's sell-off came right after a parabolic rally fueled by an acute physical shortage in China, where a retail buying frenzy and a jaw-dropping 60%-plus premium on the UBS SDIC Silver Futures Fund forced the fund to restrict new subscriptions. Even with the pullback, silver is still up roughly 150% year-to-date, its strongest run since the late 1970s, leaving gold and major equity indexes in the dust.
But here's the thing: the pullback hasn't changed the underlying bull story. Silver remains in chronic deficit as mine output can't keep pace with demand from solar panels, electric vehicles, and advanced electronics. Available inventories are sitting near decade lows, and the market is periodically slipping into backwardation, where spot prices trade above futures—a classic sign of physical tightness.
With China set to tighten exports of the metal in January, some strategists are eyeing a return to the recent $80-plus peak, with potential tests of the $85 to $100 range. Still, after Monday's wild swing, investors in SLV are getting a clear reminder that this squeeze-driven rally is going to stay volatile.
What the Numbers Say
According to market data, SLV shows exceptionally strong momentum with a 96.94 Momentum score, backed by positive short-, medium-, and long-term price trends.
iShares Silver Trust shares were up 4.77% at $69.22 at the time of publication on Tuesday. Prices are approaching 52-week highs of $71.22, and the current price sits significantly above both the 50-day and 200-day moving averages, reflecting a robust upward trend. That positioning often signals strong market confidence, suggesting buyers are willing to pay a premium and reinforcing the bullish sentiment.
