Silver prices have experienced a rapid ascent recently, but according to BCA Research, the likelihood of a substantial price correction is increasing. Roukaya Ibrahim, the chief commodity strategist at BCA, cautions investors against pursuing the current rally indiscriminately, arguing that speculation rather than core market fundamentals is primarily responsible for driving prices higher.
In a research note issued Tuesday, Ibrahim detailed how the surge in silver appears to be propelled by speculative activity. She emphasized that various market indicators reveal extremely overbought conditions, suggesting that the upward momentum may be unsustainable. This parabolic rise contrasts with underwhelming industrial consumption trends, as data indicate that industrial demand for silver actually decreased during 2025.
BCA Research identified several signs of speculative excess, including a marked increase in retail investor participation and behavior driven by fear of missing out. Investor sentiment has reached elevated levels, with market interpretations, such as misunderstandings about Chinese export policies and tariff-related optimism, fueling additional buying interest. Despite these market dynamics, BCA clarifies that no substantive changes have taken place regarding China’s silver export regulations.
Moreover, the firm highlights that the elevated prices are already causing some demand destruction, especially in China. Chinese solar panel manufacturers have shifted towards utilizing base metals instead of silver, even though solar installations increased last year. This phenomenon, known as silver thrifting, led to a decline in silver consumption within the photovoltaic sector.
Looking forward, BCA Research maintains that justifying silver’s price spike is becoming increasingly challenging. The firm sees evidence of FOMO-driven buying not only in silver but across the wider precious metals market. Technical indicators show stretched conditions and overbought signals, which together point toward a likely significant market adjustment.
Ultimately, in the context of precious metals investment, BCA Research suggests that gold currently offers a more attractive risk-reward profile compared to silver, given the latter's heightened volatility and speculative dynamics.