Recently, the silver market has been a roller coaster—rising 170% in 12 days to hit a 46-year high, then dropping 12% in just 3 days. This kind of move really left people stunned.

First, let's look at the reasons for the rally. How tight is the global silver supply? For five consecutive years, demand has outstripped supply, with inventories at historic lows. The London deliverable silver stockpiles are only enough to meet 10 days of global demand. And that’s not all—solar photovoltaic and new energy vehicle industries are fiercely competing for supplies. Currently, 55% of silver flows into the PV sector, with demand doubling. Plus, after gold prices surged fiercely, funds started shifting into silver, with institutional speculative capital jumping in, fueling this explosive rally.

But the good times didn't last. Regulatory authorities stepped in to cool the market—CME and the Shanghai Futures Exchange simultaneously raised margin requirements, forcing leveraged positions to be liquidated, causing a stampede of long positions. Coupled with the already excessive price gains, speculative traders started taking profits and exiting. Liquidity was already poor before New Year’s, and volatility was amplified tenfold, leading to a sharp plunge.

What’s next? In the short term—1 to 2 weeks—silver is expected to oscillate and recover between $69 and $73, so don’t rush to chase highs or cut losses. From a medium-term perspective—1 to 3 months—the supply and demand fundamentals haven't changed. The peak season for PV demand continues, so the probability of a sideways upward trend is high. For the long term, keep an eye on the Federal Reserve’s rate cut pace and technological iterations in PV.

For trading strategies, short-term traders can buy low at $69–$70 and sell high at $72–$73, with a stop-loss set at $68.5. Keep positions light and leverage no more than 2x. The mid-term approach is to build positions in batches between $65 and $68, investing 15% of your capital each time, with a target of $78–$82. Exit immediately if it falls below $65. Long-term investors should dollar-cost average monthly, ignoring short-term fluctuations but remaining cautious of policy changes and technical risks.

Final note: Silver’s market cap is only one-tenth of gold’s, and its volatility is even more intense than cryptocurrencies. Never hold large positions or use leverage—position management is key to survival.