Silver: 'Too Much' Risk Premium Priced In, StoneX Says

Market Dynamics - Silver is known for its volatility, moving more significantly than gold during market trend changes, whether bullish or bearish [1][2] - Typically, if gold moves by a certain percentage, silver will move by two to two and a half times that percentage, indicating a higher sensitivity to price changes [2] Price Behavior - Recent market activity showed a significant unwinding of an overstretched move in silver, with a similar but lesser effect on gold [2] - The price action of silver is primarily driven by demand rather than production costs, as less than 30% of silver production comes from primary silver mines [5][6] Technical Analysis - At elevated price levels, technical analysis becomes crucial, utilizing tools like moving averages and Fibonacci retracement levels to assess market behavior [7] - Both gold and silver recently retraced to the 61.8% Fibonacci level, indicating a potential correction in their price movements [7] Geopolitical Influences - Geopolitical factors supporting gold remain relevant, but a recent announcement regarding a presidential nominee removed a key area of uncertainty, contributing to market declines [8][9]