Silver’s Breakout Is Being Confirmed
Technical strength meets physical demand as silver surges past key levels.
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Quote of the week
"Silver's on fire. As of December 17th, it's up almost 5%, a big move. Silver has already broken out of this pause, while gold is still trying to break out. Silver's already extended, it's moved to the upside, and it's breaking out again. Our target here was around $68, which we'll probably hit in the next day or two." - Chris Vermeulen
Our take: When this was recorded on December 17th, silver was trading around $66. Just nine days later, it’s north of $78, a $12 move in less than two weeks. That kind of price action highlights how quickly momentum can build once technical breakouts attract broader participation. As capital rotates into the precious metals space, silver’s smaller market and higher beta are amplifying moves to the upside. Chris flagged $68 as the next level, and the market didn’t hesitate. This is what acceleration looks like when trend, momentum, and demand align.
Chart Of The Week
Silver prices broke records this week, driven by a severe physical shortage in China that created an unprecedented price gap between Asian and Western markets. Between December 24th and 25th, 2025, physical silver in Shanghai was trading as high as $81.99 per ounce, while silver futures in New York (COMEX) were still lagging near $72.27, a massive $9 premium that we’ve never seen at this scale before.
As awareness of the dislocation spread, COMEX prices rapidly repriced. Silver finished the week near $78.40, marking an almost 16% weekly gain, narrowing the gap but still leaving a meaningful premium in favour of physical metal in China. The move highlighted how far Western paper pricing had initially fallen behind the physical market.
This extraordinary dislocation emerged as Chinese manufacturers, who consume more than half of the world’s industrial silver for solar panels and electric vehicles, rushed to secure metal ahead of critical year-end production deadlines. The buying frenzy was so intense that spot markets in Asia entered backwardation, a rare condition where buyers pay more for immediate delivery than for future contracts, signalling acute supply stress.
The episode exposed a clear decoupling between Western paper futures and physical supply-demand realities in the world’s largest silver consumption market. As traders and investors recognized that physical silver was genuinely scarce and commanding premium prices in China, global prices adjusted rapidly, pushing silver to new nominal highs. While the gap has begun to close, the historic premium between Shanghai and COMEX underscored a critical point: when physical demand overwhelms available supply, paper markets are forced to follow.
Gain of The Week
Pan American Silver closed the week just north of $55.40, up from Monday’s $53.95 open, a solid gain in a short, disjointed trading week. While most TSX-listed silver stocks were closed Thursday for Boxing Day, PAAS continued trading on the NYSE as silver futures stayed open and pushed the metal to new highs. With silver holding above $78, we’d expect strong volume in TSX silver stocks on Monday as the gap gets filled, and PAAS should benefit on both sides of the border.
This is a name we’ve tracked closely. On December 5th, we highlighted PAAS at just over $44. Less than three weeks later, it’s at $55+, a 25% move that reinforces the view that quality silver producers are compounding in this environment.
Fundamentals continue to strengthen. PAAS completed its acquisition of MAG Silver in September 2025, securing a 44% stake in the world-class Juanicipio mine, which operates at near-negative all-in sustaining costs. The company raised 2025 silver production guidance to 22–25 million ounces and moved from net debt to a net cash position, with nearly $1.5 billion in cash and equivalents. Meaningful gold production also adds leverage to gold’s rally above $4,500 per ounce.
On December 1st, PAAS released a strong exploration update at La Colorada and Cerro Moro, extending known resources. Analysts have sharply raised earnings estimates, with 2026 projections up more than 37% over the last 60 days. A Preliminary Economic Assessment for the La Colorada Skarn project is expected in 2026 and could be a meaningful valuation catalyst.
Bottom line: We called PAAS at $44 on December 5th, and it’s now at $55+, a 25% move in under three weeks. The holiday trading gap should close quickly, and with strong cash flow, top-tier assets, and silver still gaining momentum, PAAS is well-positioned to benefit as this move continues.
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Disclaimer: This content is for educational purposes only and is not financial advice. Do your own research and consider speaking with a licensed professional.