Silver’s dramatic surge has now turned into a major warning signal for investors worldwide. Market experts believe the recent rally in silver prices has pushed the metal into a high-risk bubble zone, where a sharp and prolonged decline could follow. According to market strategist Amit Goel, the current price behaviour has moved far away from fundamentals and resembles historic commodity bubbles that ended badly for investors.
Massive Intraday Volatility Raises Concerns
On Monday, domestic silver futures witnessed an intense roller-coaster move.
• Silver on MCX first touched a new record high of ₹2,54,174 per kg
• But soon after, it plunged to ₹2,22,504 per kg, losing nearly ₹31,000 within the same session
Global analysts see this volatility as a major red flag. The metal has gained rapidly over the past few months, but the speed and scale of the rise appears disconnected from real-world economic drivers.
“Classic Bubble Behaviour” — Says Global Strategist
Amit Goel, Co-Founder and Chief Global Strategist at Pace 360, issued what he called a “serious warning” to silver investors. According to him, silver’s sharp rally has no meaningful correlation with leading market indicators anymore.
“Silver is behaving exactly like previous market bubbles — detached from fundamentals and driven mainly by speculation,” Goel said.
He compared the current situation to:
✓ The 2008 crude oil spike that reached $145 a barrel before crashing
✓ The dot-com bubble of 1999–2000 that wiped out massive investor wealth
Even though silver has already corrected around 12% from recent peaks, Goel warned that the actual top may still be ahead, followed by a deep downturn.
Speculation Driving the Rally — Not Investment Demand
Contrary to popular claims, Goel stated that ETF investors are not driving the price spike.
He noted that:
• Silver ETFs have witnessed outflows in the past three days
• The real trigger is speculative trading driven by expectations around China’s upcoming silver export restrictions beginning January
He believes these expectations were greatly exaggerated, creating a hype cycle similar to the tech bubble era.
How High Could the Top Go — and How Deep the Crash?
Goel did not call a specific final peak, but suggested:
• Silver may climb back above recent highs
• It could even hit $90–100 per ounce briefly
However, he expects a major top formation by February.
Technical support lies around $70–71 per ounce, where silver could consolidate before collapsing.
His biggest warning:
“Once the bubble bursts, prices could fall 50–60% from the top.”
If ₹2.54 lakh per kg remains the peak, a 60% correction could drag silver down to nearly:
➡ ₹1.52 lakh per kg (over the next 12–18 months)
Extreme Market Indicators Flashing Red
Goel pointed out several historic danger signs:
• Gold-Silver ratio dropped from 108 to 54 within months — an extreme swing
• Bloomberg Greed Indicators have crossed 1980 bubble levels
• Past data shows similar conditions have always led to massive crashes
These signals reflect excessive greed and over-excitement among traders, which often precedes steep corrections.
What Should Investors Do Now?
Experts advise caution, especially for those who entered the market at higher levels. When assets enter a bubble phase:
✔ Profits look tempting
✖ But the crash hits suddenly and aggressively
Investors should re-evaluate their exposure, avoid panic buying, and seek professional financial advice before making decisions.
Bottom Line:
Silver’s shining rally may soon turn into a harsh shock. While short-term spikes are still possible, experts strongly believe that a deep and painful correction is not far away.
