Silver’s Rally Pauses as Investors Take Profits

Silver's impressive surge has hit a temporary roadblock. After weeks of strong gains, the precious metal closed the week lower as traders cashed in on recent profits. While underlying structural deficits and a shifting U.S. monetary policy backdrop continue to provide support, this latest pullback raises questions about the near-term trajectory. Is this a buying opportunity or a sign that the rally needs to consolidate?

The fundamental case for silver remains robust, anchored by a persistent supply-demand imbalance. The market is headed for its fifth consecutive annual supply deficit. Since 2021, the cumulative shortfall has reached approximately 800 million ounces, even as mine production has stalled near 813 million ounces.

Industrial demand shows no signs of slowing. Consumption from the solar power sector, electric vehicle manufacturing, and data center infrastructure continues to outstrip available supply. This strain is visible in physical inventories: COMEX stockpiles have plummeted 70% since 2020. The U.S. government's recent classification of silver as a critical mineral underscores its strategic importance.

Monetary policy is adding further momentum. The U.S. Federal Reserve delivered a widely anticipated 25-basis-point rate cut on Wednesday, its third such move this year. More significantly, Chair Jerome Powell struck a less restrictive tone than some markets had feared, with projections pointing to additional easing in 2025 and 2027. This dovish stance has pressured the U.S. dollar, sending the dollar index to an eight-week low. A weaker greenback typically boosts dollar-denominated commodities like silver, making them cheaper for international buyers.

Should investors sell immediately? Or is it worth buying Silber Preis?

A Healthy Pause After the Run-Up?

Despite these powerful tailwinds, a wave of profit-taking emerged on Friday. The metal retreated 2.95% to settle at $62.09 per ounce. This followed a peak of $63.98 on December 11, which marked a fresh 52-week high. Market observers, including TD Securities' Bart Melek, characterize the move as a "healthy release of pressure" following a steep ascent.

Key metrics to consider:
* Monthly Performance: Despite the Friday dip, silver has posted a substantial 30-day gain of 16.64%.
* Technical Position: The price remains within striking distance of its peak, sitting just under 3% below its 52-week high.
* Momentum Gauge: A Relative Strength Index (RSI) reading of 62.0 suggests the market is in bullish territory but not yet in extreme overbought conditions.
* Market Volatility: Annualized volatility remains elevated at 36.62%, indicating continued potential for significant price swings in both directions.

The Week Ahead: All Eyes on Economic Data

The immediate focus shifts to upcoming economic indicators. Data on the U.S. labor market, due for release on Monday, December 16, will be scrutinized for clues on the Fed's future policy path and could be the next major catalyst for silver's direction.

Looking further out, institutional forecasts remain optimistic, albeit with varying degrees of bullishness. Analysts at BNP Paribas see medium-term potential for prices to reach as high as $100 per ounce. Bank of America has taken a more moderate stance, recently raising its price target to $65.