PWD 2026 Week 1 - Silver!
Welcome to my first Podcast Weekly Digest, where I go through some of the podcasts that I have listened to in the week. I aim to give some commentary on the topic discussed, which allows me to research and validate the topic more thoroughly. I aim to write one a week, with commentary on around 1-2 podcasts. The podcast discussed in this PWD is Wall Street Breakfast - Silver tumbles after breakneck run
Wall Street Breakfast - 29 December 2025
I found it quite interesting that silver has had a great year, having a roughly 33% gain month-to-date and 170% gain year-to-date. Silver, historically, was traded at a fixed ratio with gold, however this changed in the 1800s due to wider adoption of the gold standard, and further destabilised when the Great Depression hit. Silver's price was able to be dictated by market forces more freely when the Bretton Woods System was abandoned and the US Dollar untethered from gold in 1970s. This price independence, alongside the dual nature of silver, with its industrial and investment demands, has given the metal much more volatility than gold.
Speaking on the investment potential for silver, Seeking Alpha analyst James Foord says "it's time to dollar cost average out of silver", arguing that the risk reward is unfavourable for new longs and aggressive shorts with CTAs (Commodity Trading Advisors) driving price action. Given the warning from Foord about how the price of silver is inflated due to algorithmic momentum trading, I checked some of the statistics on silver:
| Indicator | Current Reading | Implication |
|---|---|---|
| Price (Spot) | ~$71.80 | Down ~9% intraday from highs of ~$80. |
| RSI (14-Day) | ~37.0 - 45.0 | The RSI was previously >80 (Extreme Overbought), but the sharp drop has reset it rapidly. |
| 50-Day MA | ~$55.60 | Price is still ~$16 above the short-term trend, implying room to fall. |
| 200-Day MA | ~$42.70 | The price is nearly 70% above the long-term average. |
When silver broke out earlier this month, we saw price shoot to $80 highs, also pushing the RSI to above 80. When the trend reversed, gains had to be protected and investors sold, creating our 10% intraday drop. Crucially, compared to the 50- and 200-day moving averages, there is still significant room for the price to fall before finding structural support. This gap between the current price and the long-term moving averages validates Foord’s thesis that the downside risk now far outweighs the potential for further parabolic gains, making a defensive DCA the way to go.
Along with silver, other commodities have seen significant investment. However, the commodities market as a whole has seen laggards as well. Looking at the bigger picture, we can compare future-facing metals and traditional energy. Silver and copper have benefited from the combination of Green and AI investment demand, with an aggressive increase in solar installations and the massive hardware requirement of data centres. Contrast this to crude oil, which has struggled to break structural resistance - due to oversupply concerns and a slowing manufacturing impulse in legacy sectors. Investors are targeting and rotating capital into materials critical for the electrification and digitalisation of the global economy.
Beyond industrial demand, the 2025 commodities story has been heavily influenced by the re-acceleration of inflation fears and sovereign debt concerns. Gold crossed the $4500 mark earlier this year, but silver's outsized beta allowed it to capture the speculative elements of the market that gold's steady grind could not. Effectively, a debasement premium is being priced into hard assets, fuelled by loose fiscal policies ($1.8T U.S. fiscal deficit FY 2025) and gold accumulation by central banks. 254 tonnes of gold was purchased by central banks through Oct 2025 YTD, which the WGC characterises as "strategic rather than opportunistic", given that sovereigns are continuing to accumulate reserves at record high prices.
Consequently, as we are seeing with silver's sharp correction, when the "monetary hedge" narrative gets overheated, the unwind can be brutal, especially for assets like silver that lack the deep institutional liquidity of sovereign bonds or gold markets. Let's see what 2026 has in store for silver and commodities!