Silver – Weekly Analysis
Silver gained 40% in December, making it the second most profitable December on record, after December 1979. The key question now is whether this move marked exhaustion or merely the beginning of a larger advance. In this report, we assess the technical structure, momentum, and wave context to evaluate the prospects for further upside and the annual close.
CANDLES:
Silver advanced more than 170% in 2025, including a 40% gain in December alone. This makes 2025 the second most profitable year on record after 1979, when silver rose approximately 380%, with a 48% gain in December.
All smaller time frames closed the final full week of December with bullish candles, while technical indicators are issuing numerous warning signals. Historical context is particularly relevant here. Silver opened January 1980 with a 35% gap higher, rallied an additional 27%, and then collapsed sharply, losing roughly 75% during the first quarter of 1980. The subsequent decline persisted for over 10 years, with prices eventually falling more than 90% from the peak. To date, the current advance closely resembles the 1979 setup, raising the question of whether the 1980–1991 trajectory may begin to unfold in 2026 and beyond.
At present, the short- and mid-term outlook remains bullish, with meaningful odds for continued upside. That said, the market is operating under extremely stretched technical conditions, and the risk of a reversal cannot be dismissed and may materialize with little warning.
As discussed earlier, the developing monthly structure is an additional concern. November closed above October’s high, and December extended further to the upside. At the end of October, I highlighted the risk associated with such an “unhealthy” November close, and that risk has since materialized. The December candle is currently positioned entirely above the Bollinger Bands, an extreme condition that historically has not resolved benignly. Only three comparable instances exist in silver’s recorded history, and each was followed by a significant multi-year decline on the order of 40–60%. A statistical review will follow once the December candle is finalized.
Finally, it is important to emphasize that, in prior extreme episodes, major tops did not form instantaneously. Instead, they often developed over several weeks or even months, suggesting that elevated volatility and complex price behavior may persist before a definitive reversal emerges.
Elliott Waves
The long-term Elliott Wave structure remains largely unchanged. The current advance can be interpreted either as wave 3 in red or wave V in blue. Mid- and long-term technicals support the case for wave 3 and wave C of V, although at this stage there is no meaningful distinction between the two—at least none that I have been able to identify. Wave 3 has already extended to 3.414× the length of wave 1, but this does not represent a theoretical limit within Elliott Wave principles. Under these conditions, analytical emphasis shifts toward major reversal signals and large-frame candlestick behavior, particularly on the weekly chart.
SUMMARY
The metal remains bullish across all time frames, with trends firmly intact. At the same time, every frame is deeply overbought, with RSI readings above 90, and the overall technical condition continues to deteriorate. Given that the potential waves in either the red or blue count can extend higher—or substantially higher—without offering reliable upside targets, analytical emphasis necessarily shifts away from projections. Instead, candlestick behavior and technical signals will remain the primary tools for identifying major turning points. Elevated vigilance is warranted, as the risk of a sharp reversal is increasingly non-trivial.
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