French bank Societe Generale said on Dec. 30 that its quantitative models flagged bubble-like behaviour in silver prices after a sharp, near-vertical move above $80/oz. The bank’s commodity research team, led by Dr. Mike Haigh, applied the Log-Periodic Power Law Singularity (LPPLS) framework to detect super-exponential price acceleration that often accompanies late-stage instability.
Societe Generale's Analysis of Silver Market
Using LPPLS, Societe Generale classified the recent price regime as showing potential bubble characteristics, driven by very rapid short-term acceleration. At the same time, the analysts emphasise that a model signal is not a standalone forecast of collapse and explicitly warned against treating it as such.
The team also showed that plotting the series on a logarithmic scale changes the visual narrative: the rally looks more consistent with a long-term exponential trend when charted this way. Societe Generale highlights that silver’s smaller and less liquid market structure increases susceptibility to herding and feedback loops, which can trigger bubble-like diagnostics without implying a lasting reversal.
Silver Price Trends and Volatility
Silver’s rise above $80/oz in late December 2025 produced a near-vertical move that set off quantitative alarms, yet the bank notes that the same move sits within a longer compounding trend on a log scale. This difference in chart construction materially alters perceived risk and underscores why technical diagnostics should be read alongside broader context.
Because the market is relatively smaller and less liquid than some other metals, price swings can be amplified and volatility remains elevated after sharp moves. For readers interested in related market dynamics, see discussions of silver and bitcoin volatility and recent changes in margining practices.
Fundamental Drivers of Silver Demand
Beyond technical signals, Societe Generale points to a set of fundamentals supporting demand: ongoing de-dollarization trends, heightened geopolitical uncertainty, and tightening physical supply. These drivers, the bank argues, help explain why price momentum can persist even amid warning signs from quantitative models.
The report highlights China's critical role in the physical market: the country supplies 60% to 70% of refined silver globally and announced export restrictions that could reduce shipments by up to 30%. Such measures would exacerbate persistent annual deficits estimated at 200 million to 230 million ounces and tighten available physical stock.
Expert Opinions and Market Outlook
Societe Generale expects healthy corrections to extreme moves but does not treat the LPPLS bubble signal as a forecast of a structural reversal in silver’s broader upward momentum. Some market commentators have voiced more bullish scenarios — for example, see the Peter Schiff forecast — but the bank’s position is to read diagnostics as indicators of instability rather than deterministic predictions.
Why this matters
For a miner operating anywhere from a single rig to hundreds of devices, these findings matter because elevated volatility affects when and how you sell metal or convert proceeds. Even if a quantitative model flags a bubble, Societe Generale’s caution means the signal does not necessarily imply prices will collapse immediately; fundamentals like supply deficits and China’s export stance may keep physical tightness in place.
Practically, that means price swings can be sharp and sudden, which influences cash flow, resale value of mined metal, and the timing of equipment upgrades or electricity contracts. Understanding both the technical alerts and the underlying supply picture helps avoid reactionary decisions based only on headline signals.
What to do?
- Review cash-flow and margin buffers: size position and spending so you can tolerate sharp short-term price swings without forced sales.
- Stagger sales of metal or converted holdings to avoid selling all at a single high-volatility point; consider fixed-price or staged sell strategies if available.
- Monitor physical availability and premiums locally, since tighter global supply and China’s export measures can change local liquidity and costs.
- Follow both technical signals and fundamental updates from reliable sources rather than reacting to a single model output.
