Silver prices have made a dramatic move, surging above the key $35 per ounce level during the Asian trading session—marking a major breakout that has captured the attention of traders and analysts around the globe. The rally is largely being attributed to strong activity in the futures market, especially across multiple precious metals, rather than to any fundamental shift in the physical silver trade.
A Technical Breakout, Not a Physical Squeeze—Yet
According to Daniel Ghali, Senior Commodity Strategist at TD Securities, the spike in silver was not driven by heavy buying from Chinese participants on the Shanghai Futures Exchange (SHFE), which is typically a key hub for precious metals demand. Instead, Ghali described the move as a “good old-fashioned futures-led breakout” that was centered on broad-based strength across metal futures.
“The price breakout was not linked to large speculative flows in Shanghai,” Ghali explained. “It was a classic momentum-driven surge in futures markets—particularly during a low-liquidity session in Asia.”
While the sharp price move has sparked excitement, Ghali warned that this type of rally must be followed by sustained inflows and investor participation to maintain momentum. In other words, price alone isn’t enough; the breakout must be validated by increased buying interest in the days to come.
$35 Breakout Raises Hopes of Further Gains
The last time silver crossed this threshold, it made headlines around the world. Historically, when silver broke above similar price ranges, it continued to rise significantly—at times reaching as high as $50 per ounce within weeks. That precedent has led some bullish traders to hope for a repeat of history. However, Ghali was quick to advise caution.
“Just because we’ve broken above $35 doesn’t mean we’re on a guaranteed path to $50,” he noted. “Market structure, investor sentiment, and macroeconomic conditions are very different this time.”
Investor Sentiment Mixed – ETF Inflows, But Caution in China
On the demand side, silver Exchange-Traded Funds (ETFs) have seen a substantial uptick in inflows. According to TD Securities, global silver ETF holdings are now in the 98th percentile—a clear sign of growing investor interest.
However, Ghali pointed out that in previous instances, heavy ETF inflows did not always lead to continued price momentum in the following week. “The market has seen strong ETF flows before, but that doesn’t necessarily mean we’re headed for a sustained bull run,” he said.
Meanwhile, traders in China—typically a major force in metals markets—have remained somewhat cautious. Data shows that Chinese investors have only made modest additions to their positions during the overnight session, suggesting a wait-and-see approach rather than full-on bullish conviction.
London Liquidity Watch: Could a Mini-Squeeze Be Coming?
One area to watch closely is liquidity in the London silver market. Ghali warned that if ETF inflows continue at this pace, it could strain supplies and trigger what he called a “mini-squeeze” in physical silver.
Still, any possibility of a large-scale silver squeeze—similar to the one retail investors attempted in early 2021—may be dampened by recent tariff exemptions. The explicit exclusion of bullion from certain trade restrictions has helped ease concerns about a broader supply crunch.
Conclusion: Breakout Yes, But No Guarantees
Ghali ended his analysis with a Zen-like warning for traders not to get swept up in the hype. “This breakout is impressive—but it offers no guarantees. Be like water,” he said, referencing the famous Bruce Lee quote encouraging adaptability and calm in the face of volatility.
For now, silver’s breakout above $35 represents a significant technical development. But whether it leads to a long-term rally—or fizzles out like so many others—will depend on the response from global investors, physical buyers, and futures traders in the coming sessions.
