After its recent rally, many investors see silver as overextended — but a longer-term view paints a more nuanced picture.
Looking at monthly data since 1973, silver has traded above its 10-month moving average nine times at levels higher than today. In three of those instances, the move stalled near current readings, while six saw prices continue materially higher. Even in recent history, the 2020 rally pushed silver further above trend than we’re seeing now.
Using history as a guide, the data suggests potential upside of roughly 10% to 58% before silver typically stalls. Our current target sits about 17% higher from here.
However, it’s worth noting that silver’s long-term history is marked by sharp reversals. Across those nine historical peaks, silver was never higher one year later, with an average 12-month return of –26.1%.
While the current setup may still offer tactical upside, investors should approach this stage of the move with a clear risk-management plan.
