Silver breaks through $80, surpasses key resistance—catch-up rally on the way?

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On Friday, risk assets broadly rose, boosted by optimistic signs emerging from the Middle East situation. Spot silver rose 3.27% to $80.9822/oz, up 6.74% for the week, steadily rising from $72.6369 to $83.0538. COMEX silver futures climbed 3.09% to $81.720/oz, up 6.04% for the week, trading between $73.175-$83.835.

Analysis indicates that after significantly lagging behind the overall rebound in risk assets, silver is breaking through key levels and showing early signs of recovery in terms of positioning, fund flows, and volatility. Initially, it was just a technical breakout, but it is increasingly aligning with a broader cross-asset shift—revived risk appetite, declining volatility, and renewed speculative sentiment.

Silver breaks through $80

Boosted by news of the reopening of the Strait of Hormuz, silver accelerated upward, breaking through the key resistance level of $80. This breakout not only pushed silver prices well above the previous downtrend line, but also reclaimed the 50-day moving average.

Earlier this year, silver had already turned into a barometer asset for risk appetite. If risk appetite continues, some funds may rotate into this asset. The chart shows a significant divergence between the Nasdaq 100 index and silver.

Positioning remains extremely light

Weekly changes in silver ETF positions are starting to show signs of life, though overall positions still remain very light.

Silver versus VIX and MOVE

The last major plunge in the VIX was exactly the starting point of a large-scale silver short squeeze. Although the situation is not exactly the same this time, the current environment of rising risk appetite and ebbing panic may spill over and trigger another round of chasing assets like silver.

The latest sharp retreat in the bond market's fear index MOVE has produced a knock-on effect across multiple asset classes, including silver. The chart shows a comparison of silver against the (inversely taken) MOVE index.

The silver volatility index VXSLV has retreated from panic highs, but on a longer-term basis, it still remains at elevated levels. If the short squeeze intensifies, demand for call options may flow in and support volatility.

Speculative sentiment reignites

Silver and Korea’s KOSPI once displayed similar speculative characteristics, both experiencing rapid bubble bursts—but speculative trading in Korean stocks has made a comeback.

Silver remains one of the core raw materials in AI infrastructure construction. AI-related stocks (AIQ) are now experiencing a short squeeze, while silver is still lagging far behind.

Risk Disclaimer and Terms of ExemptionThe market carries risks, and investment requires caution. This article does not constitute personal investment advice, nor does it take into account the special investment goals, financial situations, or needs of individual users. Users should consider whether any opinions, views, or conclusions in this article fit their specific circumstances. Investment is at your own risk. ```