Trend Analysis

The Sprott Physical Silver Trust (PSLV), managed by Sprott Asset Management, gives investors access to physical silver. This fund, which is backed by allocated silver bars, has recently hit an all-time high. The weekly chart shows a low point in wave (II) at 6.17 on August 29, 2022. In wave I, the price rose to 11.77 before a wave II correction brought it back down to 9.61. Now, we are in wave III, where wave (1) peaked at 11.75, wave (2) retraced to 9.97, and wave (3) has risen to 18.15. After a wave (4) correction, where the price fell to 15.06, we expect wave (5) to finish wave ((1)) of III. Once wave ((1)) is done, we anticipate a wave ((2)) correction, which will pull back from the low on December 16, 2024. As long as the 6.17 pivot remains intact, the bullish trend is safe. Any pullbacks can be seen as buying opportunities, typically occurring in swing sequences of 3, 7, or 11. Be cautious, as this information comes with risks and uncertainties. This analysis is not a recommendation to buy or sell any assets and may contain inaccuracies. Always do your research before making investment decisions. Currently, it seems we are nearing the end of a strong upward trend that started in late 2024. The PSLV has surpassed its previous peak of $18.15, indicating that we are in the final wave. Derivative traders should be careful about making aggressive long positions at this point, as this rally may be close to a short-term peak.

Market Considerations

In the coming weeks, traders holding long call options or futures might want to take some profits as the trend continues. Those preparing for the next move should plan for the anticipated correction following this peak. This could include strategies like purchasing puts or creating bearish spreads once signs of a peak emerge. Fundamentally, silver’s strength is backed by strong demand. According to The Silver Institute, industrial demand is solid, especially from the solar and 5G sectors, which consumed over 650 million ounces in 2025. This ongoing demand acts as a solid price support, reinforcing the bullish trend. Additionally, the macroeconomic conditions are favorable for hard assets like silver. The Federal Reserve’s more dovish outlook and the slower-than-expected inflation rates indicated by the November consumer price index (CPI) have kept pressure on the U.S. dollar. The CME FedWatch Tool shows a high likelihood of a rate cut by the second quarter of 2026, further benefiting non-yielding assets like silver. When the expected correction starts, traders should regard any major dip as a buying opportunity for the long term. The analysis suggests this pullback will retrace gains from the December 16, 2024 low, creating a better entry point for the next major upward wave. The key is to stay patient and await this correction before re-entering bullish positions. As long as the crucial low of $6.17 from August 2022 remains intact, the long-term outlook is strong. Reports indicate a structural supply deficit in the physical silver market has persisted for several years, a trend that continues through 2025. This imbalance indicates that pullbacks could be well-supported, reinforcing the strategy of buying on dips. Create your live VT Markets account and start trading now.

here to set up a live account on VT Markets now