After silver's record-breaking surge, analysts recommend: It's time to take profits.

Since the beginning of this year, the price of silver has soared by 126%, nearly double the increase of gold. Several analysts believe that this record-breaking rally has become excessive, and investors should consider taking profits. (Spot silver weekly chart) Sameer Samana from Wells Fargo Investment Institute and Brett Donnelly from independent research firm Spectra Markets both pointed out that after this round of record-breaking surge, silver needs a breather. Although the macro and supply-demand factors that previously drove silver prices higher are still present, analysts believe the current rally is showing “impulsive” characteristics and has largely decoupled from the real-world economic background. Additionally, Donnelly warns that historical data shows that after asset prices double in a single year, subsequent returns are often poor. At the same time, technical indicators have also sent similar warning signals. Market observers note that silver’s technical indicators are nearing overbought territory, which usually signals an imminent price correction. Based on both fundamental and technical considerations, strategists suggest that investors lock in profits and patiently wait for a market pullback before seeking new opportunities. Impulsive rise detached from fundamentals Brett Donnelly of Spectra Markets points out that while the physical shortage of silver expected during 2025 has partly fueled violent price swings, the current increase seems to have exceeded what fundamentals can support. Donnelly bluntly states that this rebound has mainly occurred in an “impulsive” manner, almost unrelated to changes in the real world. He pointed out that, although silver has surged in recent months, the U.S. deficit situation has not undergone any substantial change. Meanwhile, other assets originally seen as hedges against currency depreciation, such as Bitcoin and stock indexes, have already lost direction. Therefore, silver’s current performance appears particularly isolated and lacks broad market logic support. Historical data indicates weakening returns While Donnelly is not inclined to recommend shorting silver at this moment, he has issued a clear signal: after an asset rises by 100% in one year, its future returns are usually lackluster. He analyzed historical data and found that following years when returns reached or exceeded 100%, silver often faced more challenges in the subsequent years. Although such strong annual returns are rare, when they do occur, “the following year’s performance is usually mediocre.” Based on this, Donnelly’s view is that investors should sell silver and mega-cap tech stocks going into 2026. For those seeking to hedge against currency depreciation, he suggests sticking with gold. Technical indicators show overbought levels Sameer Samana at Wells Fargo Investment Institute has reached a similar conclusion from the perspective of technical analysis. In Wells Fargo’s weekly investment report, Samana highlights the trends in technical indicators. Samana observes that the relative strength index (RSI), which measures price momentum, has reached 68, a level very close to the overbought zone. In addition, silver’s 50-day moving average is now above its 200-day moving average. In his opinion, these signs indicate that silver is in a “fairly overbought” state. He therefore suggests that investors “might want to take profits and wait for a pullback.” Risk warning and disclaimer The market has risks; investing requires caution. This article does not constitute personal investment advice, nor does it consider the investment objectives, financial situation, or needs of individual users. Users should consider whether any opinions, views, or conclusions in this article fit their specific circumstances. Investing based on this is at your own risk.