The Global Growth Indicator: Is Silver Attempting a Comeback?
Equity market indexes like the S&P 500 and Nasdaq-100 continue to make new all-time highs as geopolitical risk gets discounted, earnings performances surpass analyst expectations, and A.I. infrastructure demand remains robust. Now, silver appears to be making an attempt to move higher as well.
Silver, one of the oldest gauges of global economic health, has pulled back significantly from the parabolic move that was in full force throughout 2025 and peaked in true blow-off-top fashion on January 30th. Silver is both an industrial metal and a precious metal, roughly 50% of all silver demand comes from industrial applications, especially in electronics manufacturing. Given concerns around the Iran conflict and the resulting strain on energy supplies, fertilizers, and other key inputs for global trade, fears of a global economic slowdown could create demand slack for the shiny metal.
Over the last several weeks, however, silver has held up technically and appears to have broken out of a well-defined downtrend, leveraging the $60-ish level as key support and pushing above the 20- and 50-day simple moving averages — both of which have acted as resistance since the late-January highs. The Relative Strength Index, which measures price momentum over the last 14 days, just printed a well-defined higher low, a development many technical traders view as bullish. The Moving Average Convergence Divergence indicator, better known as the MACD, remains below the key zero line on the daily chart, but the 12-day Exponential Moving Average has crossed above the 26-day EMA — another signal regarded as bullish. If silver can close above the $84 level over the next several trading sessions, a case can be made that a near-term reversal is setting up.
What differentiates the current setup from silver's parabolic run in 2025 is the lack of short positioning, particularly from Managed Money traders. Last year, significant short positioning fueled a short squeeze that kicked off the strong rally higher, before Managed Money traders flipped aggressively net-long ahead of the blow-off top. So, what does this mean for silver today? Any bullishness will need to come from genuine, organic optimism. That said, in an environment of rising inflation, and IF a long-term peace deal is accomplished, we may see a resurgence in industrial activity that drives silver demand higher. One of the biggest factors that could halt the bullish momentum for silver, and for commodities more broadly in this cycle, is a Fed rate hiking cycle — historically the death knell for commodities in a bull run.
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