Global precious metals market witnessed another historic moment on Thursday. The spot gold price surged past the $4,900 per ounce mark, reaching an intraday high of $4,924.29. Silver’s rally was even more dramatic, breaking above $96 per ounce for the first time and setting a new all-time intraday high. Platinum also surpassed the $2,600 threshold. Amid the market euphoria, several analysts have issued warnings, noting that the silver market, in particular, is showing signs of overheating, with short-term correction risks that cannot be ignored.
Silver’s recent rally can be described as “historic.” Since the beginning of 2025, the cumulative gain for silver has approached 150%, and just since the start of 2026, its price has skyrocketed over 31%. Driving factors include robust industrial demand (especially from the photovoltaic sector), surging investment demand, and market concerns over supply tightness. However, Roukaya Ibrahim, Chief Strategist at BCA Research, points out that the current rally is increasingly detaching from fundamental support, displaying clear characteristics of “Fear Of Missing Out” (FOMO)-driven speculative activity.
Ibrahim believes that although medium- to long-term macro and geopolitical backdrops still support silver, prices have entered an “extremely overbought” zone in the short term. Technical analysis indicates that silver’s deviation from its 200-day moving average is nearing levels that have historically preceded multiple price pullbacks. Such rapid price increases, fueled by sentiment and capital flows, are often unsustainable and prone to sharp volatility if market sentiment reverses.
Industrial Demand Faces Substitution Risk: Analysts warn that record-high silver prices are accelerating the search for alternatives downstream. The world’s fourth-largest solar cell manufacturer, Longi Green Energy Technology, has announced it will begin replacing silver paste with base metals in its cells, with other PV companies making similar plans. If this trend spreads, it could undermine the fundamental pillar of long-term silver demand.
Supply Concerns Misinterpreted: Market panic over supply tightness is partly rooted in a misunderstanding of China’s export policies. Analysts clarify that China has not changed its silver export policy, merely continuing the existing export licensing management system without deliberate tightening. Furthermore, the U.S. has not yet imposed tariffs on silver imports, which should help ease global trade flow pressures.
Policy Uncertainty Looms: U.S. trade policy remains uncertain, with the Trump administration retaining the possibility of future tariffs if “satisfactory agreements are not reached in a timely manner.” This lingering uncertainty will continue to disturb the market and hinder a full correction of price imbalances.
In contrast to the cautious stance on silver, Ibrahim and her team maintain an optimistic view on gold, believing it offers the most attractive risk-reward profile among precious metals. Factors supporting gold prices are expected to persist for a considerable time. The global economy faces multiple risks, including high debt levels, trade friction uncertainties (such as recent U.S.-Europe tensions over Greenland), and geopolitical conflicts (like strategic competition in the Arctic). Gold’s role as the ultimate safe-haven asset underpins solid demand.
Simultaneously, global efforts, particularly by emerging market central banks to diversify their foreign exchange reserves, provide a sustained and stable source of buying for gold. Against a backdrop of market skepticism regarding the Federal Reserve’s policy independence (highlighted by recent legal entanglements involving Chair Jerome Powell), the long-term value of the U.S. dollar, and global inflation prospects, gold’s monetary hedging properties are being repriced.
Analysts explicitly state that silver has accumulated significant technical overbought pressure and fundamental substitution risks in the short term. Investors should be wary of potential sharp corrections from chasing the rally. The market expects the gold-silver ratio, which has fallen to multi-year lows, to begin rising. Meanwhile, gold is projected to maintain a relatively stable trajectory, supported by its unique safe-haven attributes and central bank demand.
