Silver’s Rally Gains Momentum Amid Geopolitical and Supply Pressures

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A swift U.S. military operation in Venezuela and the detention of President Nicolás Maduro have jolted commodity markets, propelling silver back into the spotlight. Following a margin-driven selloff the prior week, the metal is staging a powerful comeback. The critical question for investors is whether this surge is merely a short-term reaction to geopolitical shock or the beginning of a sustained move higher, fueled by already tight underlying fundamentals.

Beyond the headlines, silver's fundamental backdrop remains exceptionally tight. The market is projected to face a structural deficit of approximately 117 million ounces in 2025, indicating that global demand is set to substantially outstrip supply.

Industrial consumption, a key demand driver, already hit a record during 2024, with usage reaching around 680.5 million ounces. The photovoltaic sector alone accounted for over 30% of this total, underscoring silver's critical role in solar panel manufacturing and intensifying pressure on physical availability.

On the supply side, challenges are mounting. China, a major global producer, has tightened its silver export policies for 2025, reportedly causing delivery delays in international markets. This comes amid already low visible inventories; stockpiles in London are estimated to cover only about six weeks of global demand, painting a picture of a strained physical market.

From Margin Crash to Geopolitical Rebound

The current recovery arrives directly on the heels of a sharp "margin crash" the previous week. During that selloff, prices were pushed down from levels above $84 per ounce to a range around $71-$73. This move was not triggered by real-economy factors but by exchange policy: both the CME Group and the Shanghai Futures Exchange significantly raised margin requirements for silver futures contracts. The CME's initial hike demanded roughly 13.6% more collateral from traders, forcing highly leveraged participants to unwind positions.

The result was a wave of forced liquidations that temporarily depressed the price. However, the geopolitical shock emanating from Venezuela has shifted the market's focus. Technical selling pressure has receded, giving way to momentum driven by fundamental and safe-haven demand.

This shift is reflected in the charts. The current price trades more than 20% above the 50-day moving average of $62.34. The Relative Strength Index (RSI) reading of 62.0 signals a bullish, but not yet overbought, environment. Nevertheless, the annualized 30-day volatility hovering near 61% highlights the market's ongoing nervousness.

Monetary Policy Adds a Supportive Backdrop

Adding another layer of support is the shifting interest rate environment. Futures markets are currently pricing in two interest rate cuts from the U.S. Federal Reserve during 2026. A move toward easier monetary policy would likely apply downward pressure on the U.S. dollar, making dollar-denominated commodities like silver more attractive to holders of other currencies.

Against this backdrop, market observers are discussing scenarios that could see silver approach the $100 per ounce mark by 2026. Prominent figures like Robert Kiyosaki have cited the potential for a direct run at this psychologically significant level. Such forecasts, however, are contingent on the persistence of physical scarcity, sustained geopolitical tension, and the Fed following through with its anticipated policy pivot.

Key Levels and Immediate Catalysts

As of the latest Asian trading session, silver jumped to approximately $75.40 per ounce. Key metrics illustrate the scale of the recent move:

• Friday's Closing Price: $72.27
• 30-Day Change: +27.84%
• Distance from 52-Week Low ($46.90): +60.29%
• Distance from 52-Week High ($81.66): –7.95%

The immediate outlook remains highly volatile. While the Venezuelan situation remains fragile—with the military's recognition of interim President Delcy Rodríguez leaving the timing and stability of any power transition unclear—attention is also turning to key U.S. economic data. Indicators like the ISM Purchasing Managers' Index, due this week, could influence interest rate expectations and, by extension, sentiment in the silver market.

Conclusion: Volatile but Bullish

Silver is currently trading in a zone of pronounced instability, supported by a potent mix of geopolitical uncertainty, structural supply deficits, and speculative capital flows. The price sits well above its 50-day average yet remains meaningfully below its recent 52-week peak, leaving room for movement in either direction.

As long as the situation in Venezuela remains unresolved and no supply-side relief emerges, the balance of factors suggests sustained upward pressure. The coming weeks will likely be dictated by two key developments: whether elevated margin requirements trigger further technical setbacks, and whether incoming U.S. data confirm the market's expectation for two Fed rate cuts in 2026. Should these align, the currently bullish narrative for silver could gain further strength.