The big story of the week, and certainly the biggest moving asset in the market during the Christmas Holiday trading week, was silver. Spot Silver ended the week at a new all-time high of $79.13 as physical metal trades at a $7-8 premium in Hong Kong and Shanghai. The fundamentals for such a rally have been in place all year long, and the irony is that while crypto-promoters were babbling about corporations buying Bitcoin for their balance sheets, it is in fact silver that corporations are buying in order to secure necessary supplies required to make their products.One example is Samsung Electronics which, through its Samsung C&T subsidiaries, announced a $7 million prepayment to Silver Storm Mining (SVRSF) to secure silver supply. Tesla (TSLA) CEO Elon Musk has warned that manufacturers could suffer the consequences of higher silver prices, so it will be interesting to see how this affects the tech sector, which is a heavy user of silver. All of this was not due to Trump declaring himself to be The Silver President, but simple economics. Silver is a hard asset, a real asset, and a necessary component of modern electronics, including AI-related hardware, that has a) been in severely short supply for years now and b) artificially suppressed by the U.S./London paper futures market axis. It is now being dismantled by the physical reality of the market place.
Friday's move was the largest single-day dollar move in silver since 1980 when the Hunt Brothers attempted to corner the silver market. Their attempt was derailed when on January 7, 1980, the Commodity Exchange (COMEX) introduced "Silver Rule 7", which imposed strict limits on new margin purchases of silver futures (effectively "liquidation only" for large positions) and raised margin requirements. This rule was adopted under pressure from the Commodity Futures Trading Commission (CFTC). Back then it was just two rich kids trying to corner the silver market, but today the buyers are numerous corporate and sovereign entities seeking to secure dwindling silver supplies, a metal that was declared a Strategic Mineral by the U.S. on November 6th.
With silver prices getting a bit beyond the control of Western fiat forces, expect volatility to reign. The COMEX may attempt to stop the rally by raising margin requirements, but they have already done so several times in December with absolutely zero effect. All it did was lock out paper shorts on the COMEX as physical buyers swarmed the Hong Kong and Shanghai metals exchanges.Meanwhile, gold has broken out to new highs and will likely continue higher as the move into silver triggers similar moves in other precious and industrial metals. Spot Gold ended the week at $4,532.52 an ounce, another all-time high as the yellow metal emerges from a nine-week cup-with-handle base.
Note that we have issued several reports in recent weeks on the potential for gold and silver to move higher. Of note is Chris' piece on gold and silver prices sent out on December 8th as a Market Lab Report and titled, "Gold & Silver Price Outlook: Why Gold Climbs & Silver Acceleration in 2026." On December 4th we sent out reports on a variety of precious metals names, including Barrick Mining (B), Equinox Gold (EQX), Gold Fields Ltd. (GFI), Kinross Gold (KGC), McEwen Corp. (MUX) and New Gold (NGD).
We also issued VDU Reports on Gold exploration names NovaGold Resources (NG) and Nova Minerals Ltd. (NVA), as well as silver miner First Majestic Silver (AG) on December 24th, a Pocket Pivot Report on the SPDR Gold Trust (GLD) on December 12th and VDU Reports on gold miner AngloGold-Ashanti (AU) and silver miner Coeur Mining (CDE) back on December 17th. Gil has also repeatedly discussed opportunities among gold and silver miners during our live webinars over the past several months, so VoSI has been on top of this for some time. Nevertheless, it is fascinating to see how quickly things have ramped up as we head into year-end 2025. Many gold and silver miners remain within buying range so we will see how these set-up heading into year-end.
What Gil likes to refer to as the other precious metal, copper, has also caught fire as the United States Copper Fund (CPER) posted a buyable gap-up move on Friday using the 35.52 intraday low as a selling guide. Keep in mind that copper trades continuously overnight so gap-up moves are not evident in the actual copper futures. Nevertheless, the magnitude and velocity of Friday's move implies the potential for further upside from here as the realization that copper, which was also added to the U.S. List of Critical Minerals on the same day as silver, is subject to its own set of supply constraints.
Aluminum has also been on fire as of late, and so on December 10th we issued a VDU Report on Century Aluminum (CENX) as it posted both a VDU pullback to and moving average undercut & rally (MAU&R) at the 50-dma (and the 20-dma as well, for that matter) at that time. The ensuing move rivals the moves in both silver and copper over the past two weeks.
As precious and industrial metals dominated the performance side of the equation during the Santa Claus Melt-Up Rally following the record $7 trillion OpEx of two Fridays ago tech has lagged but stull most big-stock techs have edged higher, mostly in wedging rallies. The SPDR Select Sector Technology (XLK) ETF illustrates the action as it approaches the boundary of a currently unresolved pennant formation. Our expectation is that if the general market rally continues into 2026, commodity-related stocks may continue to dominate as technology settles out to some extent and allows the strongest players to emerge from the crowded AI space. Stay tuned!
The Market Direction Model (MDM) switched to a BUY signal on Wednesday, December 24th.