Silver Rally May Be Close to Peaking With 20% Correction Possible, Says PACE 360
Silver prices face potential peak after 50% monthly surge, with PACE 360's Amit Goel warning of resistance at $98-99/oz and possible 20% correction. Gold-silver ratio hit new low of 49.35, while regulatory actions including higher margins signal market overheating concerns.
*this image is generated using AI for illustrative purposes only.
Silver prices have delivered extraordinary gains over recent months, but market analysts are now warning that the historic rally may be approaching its end. According to Amit Goel, Co-founder and Chief Global Strategist at PACE 360, the powerful uptrend that began around mid-2025 is showing signs of entering its final phase, with the likelihood of a top forming between now and mid-February being high.
Exceptional Gains Signal Market Overheating
The precious metal has demonstrated remarkable performance, with prices surging another 50% in just the last month despite already being at record highs earlier. Goel pointed out that such rapid gains often signal overheating in the market, suggesting caution for investors.
| Performance Metric: | Details |
|---|---|
| Monthly Surge: | 50% in last month |
| Rally Start: | Mid-2025 |
| Current Status: | Record high levels |
| Peak Timeline: | Between now and mid-February |
Technical Resistance Levels Emerge
Technically, silver is now approaching critical resistance zones that could mark the end of this cycle. Goel identified key resistance levels around $98–$99 per ounce, with an upper band near $103-104 potentially marking a peak for this cycle. These technical indicators suggest limited upside potential from current levels.
Gold-Silver Ratio Signals Caution
One of the key indicators flagging caution is the gold-silver ratio, which has reached a new low of 49.35. This represents a massive decline from the level of 108 recorded in April. Goel emphasized that resistance is likely to come from both the gold-silver ratio and absolute silver prices. The divergence between gold and silver performance, with silver moving far more aggressively while gold prices remain relatively stable, strengthens the case that silver may be closer to exhaustion than gold.
Regulatory Actions Add Pressure
Regulatory measures across global exchanges are coming into focus as authorities respond to the rapid price movements. Key regulatory actions include:
- Higher margins implemented on COMEX and MCX
- Restrictions on speculative trading from the Shanghai exchange
- Increased scrutiny of trading activities
These measures indicate that regulators are uneasy with the speed and scale of the silver rally. While Goel believes these steps may slow momentum, they are unlikely to immediately reverse the trend during a historic bull run.
Sharp Correction Warning
Goel warned that once silver reaches its price targets, the downside move could be particularly sharp. He cautioned that a correction of around 20% is possible, which while steep, would not be surprising after such a strong and rapid rally. The risk of a pullback increases further given that silver is currently trading at a 6–7% premium on MCX compared to global prices.
| Risk Factor: | Impact |
|---|---|
| Potential Correction: | Around 20% |
| MCX Premium: | 6-7% above global prices |
| Market Condition: | Overheated after rapid gains |
| Regulatory Response: | Increased margins and restrictions |
The combination of technical resistance levels, regulatory pressure, and extreme price premiums suggests that silver investors should prepare for potential volatility ahead as the market may be approaching a significant turning point in this historic rally.
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