Societe Generale(US:SCGLY) Xin Lang Cai Jing·2025-12-30 13:18Core Viewpoint - A top investment bank's model indicates that silver is in a bubble, but internal analysts are not convinced of this assessment [1][5]. Group 1: Market Performance - Silver experienced its largest single-day drop since February 2, 2021, due to increased margin requirements, but rebounded strongly the following day, with a year-to-date increase of 153% [1][5]. - The analysis by Societe Generale suggests that when silver's price movements are viewed on a logarithmic scale, the projected surge in 2025 appears less extreme, supporting the notion that silver has followed a consistent compound growth logic over the past 25 years [1][5]. Group 2: Bubble Characteristics - The analysis utilized the "Log-Periodic Power Law Singularity" (LPPLS) framework, which previously identified bubbles in 2010 and 2020, indicating that the current market conditions exhibit bubble characteristics, defined as prices accelerating towards a critical point at an exponential rate [1][5]. - The report emphasizes that as the bubble matures, price fluctuations are expected to become more frequent [1][5]. Group 3: Structural Changes and Supply Factors - The report highlights two significant drivers for the increase in silver prices: export restrictions due to national security concerns, which could reduce silver exports by 30%, exacerbating an existing supply gap of approximately 200 to 230 million ounces in the global market [3][7]. - Additionally, U.S. regulatory actions are critical, with the Bureau of Industry and Security (BIS) set to make a ruling in January regarding silver's status as a critical mineral, given that the U.S. relies on imports for 64% of its silver needs [3][7]. - If tariffs on silver exports are imposed, the already tight supply situation in major trading hubs like China, India, and London could worsen significantly [3][7]. - Notably, in some markets, the premium for physical silver transactions has reached 10% to 15% [4][7].