[Market Analysis] "The strongest rally in history" silver market experiences a rare phenomenon opposite to 'ETF'

Recent silver prices have shown a explosive upward trend, hitting record highs for consecutive days, while at the same time, the market is experiencing an abnormal phenomenon of breaking traditional correlations, attracting attention.

According to London Stock Exchange (LSEG) data, despite a brief correction last week, silver prices continue to rebound unstoppable and hit new record highs. They demonstrate strong momentum far exceeding the short-term moving average (21-day moving average), continuously leading market trends.

◇ JPMorgan Chase: “Strong demand persists amid easing tariff risks”

Global investment bank JPMorgan Chase recently analyzed the background of the silver market’s strength and maintained an optimistic outlook.

JPMorgan Chase first pointed out that the results of the US steel and aluminum tariff investigations were more moderate than expected, easing market uncertainty. This reduces the short-term tariff risks faced by silver and alleviates concerns over inventory shifts. JPMorgan Chase commented: “Although tariff measures have temporarily paused silver’s rally, active buying on dips confirms strong short-term demand.”

◇ ETF outflows and price “advance into new stages”…

The most notable change is the “decoupling” phenomenon between silver prices and exchange-traded fund (ETF) fund flows.

According to JPMorgan Chase analysis, until the second half of 2025, the increase in silver prices and ETF fund inflows have always shown a positive correlation. Metals Focus estimates that by 2025, global holdings of silver-related listed exchange-traded products (ETP) will have increased by 27% year-over-year to 278 million ounces, with total holdings reaching approximately 1.32 billion ounces. Notably, Bloomberg-tracked ETFs grew by about 12% just in the fourth quarter, exacerbating supply-demand imbalance in the physical market.

However, since the end of 2025, this correlation has begun to break down. During the period when silver prices surged by about $20 per ounce (a 25% increase) after Christmas, Bloomberg-tracked ETFs experienced a net outflow of 18 million ounces. Meanwhile, speculative long positions in the futures market have also been declining since mid-December. This suggests that, beyond traditional investors, other strong forces are now dominating the silver market.

◇ “Industrial demand under pressure; Chinese regulation… warning signals also evident”

JPMorgan Chase also issued warning signals regarding this overheated trend.

The bank pointed out the following risk factors: ▲Signs of easing supply outside the US ▲Recent ETF fund outflows ▲Rising silver prices increasing costs for industries like photovoltaics ▲Chinese regulators tightening trading controls (Shanghai Futures Exchange restricting high-frequency trading and reducing position limits). JPMorgan Chase cautiously stated: “The fatigue from short-term rapid gains still poses a risk of significant correction,” and “Given the rapid decline of the gold-silver ratio, investing in gold may be more advantageous than silver in the short term.”

Additionally, it was added that although no drastic changes have yet occurred, close attention should be paid to the phenomenon where, amid soaring spot prices, silver volatility index has slightly declined.

◇ “Far from the all-time high… accounting for inflation, it could reach $200 per ounce”

Nevertheless, the market remains generally optimistic about silver’s long-term upside potential.

Analysis indicates that although current silver prices have hit nominal record highs, compared to the actual historical high adjusted for inflation (about $200 per ounce), there is still about $120 of room for growth. This suggests that despite short-term fluctuations, silver remains an attractive investment target.