Core Viewpoint - The silver market is experiencing significant volatility, with prices recently reaching historical highs, driven by strong retail investor demand and supply constraints [1][3]. Group 1: Market Performance - As of December, silver prices have maintained a parabolic upward trend, trading around $58.63 per ounce, with a peak of $59.65 per ounce earlier [1]. - Silver has seen a remarkable increase of over 100% year-to-date, a rare occurrence in precious metals history [1]. - In November, silver futures rose by 18.6%, marking the best monthly performance since July 2020, largely due to retail investors' increased participation [3]. Group 2: Trading Activity - The average daily trading volume of standard silver futures reached 108,000 contracts, a 22% increase compared to November 2024 [2]. - The average trading volume for micro silver futures surged to 75,000 contracts, a 238% increase year-over-year [2]. Group 3: Demand and Supply Dynamics - Analysts highlight that the recent surge in silver prices is primarily driven by retail investor demand, particularly through micro contracts [3]. - The ongoing supply constraints, coupled with strong demand, are expected to provide long-term upward momentum for silver prices [1]. Group 4: Technical Analysis - Silver prices are attempting to hold above the resistance level of $58.60-$58.80 but are showing signs of losing momentum [4]. - A drop below $56.50 could lead silver prices towards the support level of $52.60-$52.80 [4].

Core Insights - The average daily trading volume of micro silver futures surged by 238% year-on-year in November 2025, while standard silver futures only saw a 22% increase, indicating a significant shift towards retail participation in the market [1] - The overall increase in silver futures prices was 18.6% in November, with a notable 14.5% rise in the last week attributed to retail investors entering the market [1] - The London Bullion Market Association (LBMA) reported a drastic decline in available silver inventory from 850 million ounces in 2021 to 200 million ounces by October 2025, a drop of over 70%, highlighting a mismatch between trading demand and physical deliverable supply [1] Market Dynamics - Retail investors' physical silver purchases and increased ETF holdings led to a spike in silver borrowing rates, which reached 200%, causing major market-making banks to withdraw due to performance risk [1] - The bid-ask spread widened to $1.2 per ounce, resulting in a near standstill in the market, which further fueled retail investors' perception of silver scarcity and prompted additional buying, creating a vicious cycle [1]