Despite higher margin requirements triggering the biggest one-day drop in silver since 2 February 2021 on Monday, the front-month futures contract rebounded strongly on Tuesday, and is now up as much as 153% year-to-date.

The Global Head of Commodity Research at Societe Generale noted that when silver’s price action is converted from a standard linear chart into a logarithmic time-series, the surge in 2025 looks far less extreme. In SocGen’s view, this confirms that silver has in fact followed the same compounding growth pattern over the past 25 years.

Even so, this year’s rally is undeniably extraordinary. Using a log-periodic power law singularity framework to analyse silver – a model that previously identified the silver bubbles in 2010 and 2020 with high accuracy – the bank concludes that the current move does exhibit classic bubble characteristics.

Under this framework, a “bubble” is defined as prices accelerating towards a critical point at a super-exponential pace, with price oscillations becoming increasingly frequent as the bubble matures.

However, the crucial point is that investors should not rely on this model alone. In an era where de-dollarisation and heightened geopolitical uncertainty coexist, the outlook for precious metals has undergone a structural shift – a shift that traditional models are simply unable to capture.

US regulatory developments also deserve close attention. The US Bureau of Industry and Security is due to issue a ruling in January on whether silver, as a critical mineral, poses a threat to national security. The United States currently relies on imports for around 64% of its silver. If the Trump administration were to impose export controls or tariffs on silver as a result, already-tight physical markets in key hubs such as China, India and London could see supply conditions deteriorate sharply.

Market Commentary:

On the weekly chart, silver is consolidating at elevated levels, with MACD lines and histogram contracting above the zero line. Any export restrictions introduced on national-security grounds would be highly disruptive. Societe Generale estimates such measures could reduce silver export volumes by around 30%. Given that the global market is already running a persistent supply deficit of roughly 200–230 million ounces, this would risk further aggravating the shortage and amplifying price volatility.