Current Situation
Silver (XAG/USD) has dropped sharply to $91.32 per ounce, down -3.39% in the current session, after briefly touching all-time highs above $95 just hours ago.
Key Statistics
Current Price $91.32/oz
Session Change -3.39% (-$3.20)
Recent High $95.87 (Tuesday, Jan 20)
24h Range $90.00 - $95.00+
Volume 202.67K (extremely high)
THE PARADOX Why Is Silver Falling While Fundamentals Are Bullish?
The Contradiction
Silver just hit all time highs above $95 on Tuesday, yet is now crashing. Here's why
REASONS FOR THE CURRENT DROP
Profit-Taking After Historic Rally
Silver has surged over 150% in the past year (from $30 to $95) After such an explosive move, profit taking is inevitable.
Traders who bought at $70-80 are locking in gains
Short-term speculators exiting positions
Technical resistance at $95-96 triggering sell orders
Trump Skips Critical Minerals Tariffs
President Trump announced he would skip import tariffs on critical minerals, which initially caused confusion
Silver is used in critical industrial applications
Market initially sold off on reduced tariff protection
However, this is actually neutral to bullish for industrial demand
Geopolitical Tensions Cooling (Temporarily)
While Trump is escalating Greenland tensions, the immediate market reaction shows
Bond yields stabilizing after initial selloff
Stock market attempting to recover
Flight to safety trade partially unwinding
Technical Pullback from Overbought
Chart Analysis
Silver broke above $95 (psychological resistance)
Failed to hold classic bull trap pattern
Now pulling back to test support at $93-94 area
Volume spike suggests forced liquidation, not panic selling
BUT THE BIGGER PICTURE REMAINS BULLISH
Despite today's drop, the fundamental case for silver is stronger than ever
Physical Supply Crisis
The market has experienced four consecutive years of global deficits, with shortages deepening rather than easing. Retail investors in China, India, and the Middle East are fueling a global squeeze as rising prices attract increased buying interest.
COMEX Inventory Drain
Between early and mid January, 33.45 million ounces of silver were physically withdrawn for delivery from COMEX roughly 26% of registered inventory disappeared in one week.
A significant portion of registered silver is either non eligible or already encumbered, meaning the pool of actually deliverable silver is much smaller than headline figures suggest.
Paper vs Physical Price Disconnect
The heaviest traded COMEX March 2026 contract closed Friday at $72.26/oz. Yet in Dubai, a significant bullion hub, the cheapest one-ounce coin trades at $99.93.
That's a $27+ premium for physical This is not a normal fabrication premium it's a sign that paper and physical have diverged.
China's Strategic Reclassification
China has reclassified silver as a strategic material, restricting exports. This has
Fragmented the global market
Exacerbated supply shortages
Triggered central bank accumulation
Industrial Demand Explosion
Silver demand is surging from
Solar energy massive expansion globally
AI data centers require silver-based components
Nuclear power control rods and components
5G infrastructure silver conductivity essential
Electric vehicles each EV uses 1oz of silver
Greenland Geopolitical Premium
Trump is escalating his push to acquire Greenland, threatening tariffs against 8 European countries. This is
Boosting safe-haven demand
Creating dollar uncertainty
Driving flight to hard assets
The European Union is considering retaliatory measures, and Denmark has flatly rejected US demands.
EXPERT PREDICTIONS FOR 2026
Short term (Q1 2026)
If recovery momentum continues and meme coin like retail interest persists, silver could post a 15-20% gain from current levels, potentially moving toward the $105-110 range by end of Q1.
Medium-term (2026)
Robert Kiyosaki (author of Rich Dad Poor Dad) predicts silver could reach $200 by end of 2026, citing
Persistent physical shortages
Currency debasement
Institutional FOMO
Metals Focus expects silver highs well above $100 in 2026, driven by
Persistent inflation
US trade/foreign policy uncertainty
Long-term debt concerns
De dollarization trends
The Bear Case
If the Federal Reserve conducts rate hikes in 2026, silver prices could drop as
Higher yields make bonds more attractive
Industrial demand slows
Strong dollar pressure
Analysts note If industrial demand slows and real yields rise again, silver could either stabilize or retreat from current price levels.
TECHNICAL ANALYSIS
Key Levels
Resistance
Immediate $95.00 (recent ATH)
Psychological $100.00
Target $105-110 (if breakout confirmed)
Support
Critical $90.00 (psychological)
Strong $87-88 (major accumulation zone)
Last resort $82-83 (50-day EMA area)
Chart Pattern
Your chart shows a classic blow-off top:
Parabolic rise to $95.87
Sharp rejection
High-volume selloff (-3.39%)
Now testing $91 support
This is either
Healthy pullback before next leg up to $100+
Top formation leading to deeper correction to $82-85
Key determinant: Can it hold $90? If yes → bullish. If breaks watch $87.
TRADING STRATEGY
For Bulls Long-term investors
This pullback is a GIFT if you believe in the thesis.
Entry $88-92 (current zone)
Add more If it dips to $85-87
Target 1$100 (psychological)
Target 2 $110-120 (Q1 2026)
Stop Loss Below $80 (invalidates bull case)
Rationale Physical shortage + geopolitical premium + industrial demand = structural bull market
For Bears
The rally is overextended profit-taking is healthy.
Short Entry Failed breakout above $95
Target 1 $87-88 (retest recent support)
Target 2 $82-83 (50% retracement)
Stop Loss Above $96 (new ATH invalidates short)
Rationale: +150% in 12 months is unsustainable; technical correction needed
For Neutral
Sit on hands until clarity emerges.
Wait for $90 break (signals deeper correction)
OR wait for $95 reclaim (confirms continuation)
Don't chase in either direction yet
RISKS TO WATCH
Upside Risks (could push to $100+)
Physical delivery squeeze intensifies
Trump escalates Greenland crisis
Fed pivots to more QE (money printing)
Major silver ETF approval (like DOGE ETF)
Industrial shortage becomes crisis
Downside Risks (could drop to $80-85)
Fed signals rate hikes
Global recession kills industrial demand
Dollar rallies hard
Margin requirement increases (forces liquidation)
Geopolitical tensions de-escalate
MY TAKE
This is NOT a crash it's a PULLBACK in a STRUCTURAL BULL MARKET.
Here's why I remain bullish longterm
The Physical Shortage is REAL
COMEX losing 26% inventory in 1 week is unprecedented
$27+ premium for physical over paper proves it
China hoarding + central banks buying = supply shock
Industrial Demand is IRREVERSIBLE:
AI/solar EVs need silver - no substitute
Can't print silver, can't create it
Mining production flat/declining
Currency Debasement Accelerating
Fed back to QE despite inflation
Trump threatening tariffs everywhere
De-dollarization trend growing
BUT
Short-term volatility is GUARANTEED
$30 $95 in 12 months is parabolic
Profit-taking will be violent
Could easily see $82-85 before $100
CONCLUSION
Silver dropped -3.39% today NOT because fundamentals changed, but because
Profit-taking after +150% rally
Technical resistance at $95
Short-term geopolitical de-escalation
The bull case remains intact
Physical shortage worsening
Paper/physical disconnect widening
Industrial demand exploding
Central banks accumulating
My Prediction
Next 2-4 weeks Volatility, possible test of $85-88
Q1 2026 Re-test $95, potential breakout to $100-110
2026 Year-end $120-150 (conservative), $180-200 (bullish case)
Strategy: Use pullbacks to accumulate. This is a multi-year bull market, not a trade.
Are you buying this dip, or waiting for lower levels?
Disclaimer
This is not financial advice. Do your own research and consult with a financial professional before investing. Silver is highly volatile and speculative.
