Deriv review: Silver rebounds after sharp holiday selloff

Deriv review: Silver rebounds after sharp holiday selloff
Silver recovers as supply tightness supports prices

​Silver prices rebounded to around $74.50 per ounce after suffering a sharp decline of more than 9% from record highs above $80 per ounce, according to market commentary shared by Deriv. The pullback, which unfolded during thin holiday trading conditions, highlighted how reduced liquidity amplified profit-taking following a strong rally.

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The rebound suggests that despite short-term volatility, underlying fundamentals in the silver market remain supportive, particularly as industrial demand continues to grow.

Holiday liquidity exposes market fragility

Deriv noted that the steep decline was not driven by a sudden shift in fundamentals but rather by thin holiday liquidity, which tends to exaggerate price moves. With fewer participants active in the market, even moderate selling pressure was enough to trigger a sharp correction from record levels.

Following the drop, prices stabilized and recovered part of the losses, underscoring that the broader bullish narrative for silver has not been fundamentally altered. Market participants remain cautious, however, as year-end conditions continue to limit liquidity and increase short-term volatility. 

 

Physical premiums signal tight supply

Beyond futures pricing, Deriv highlighted signals from the physical market that point to ongoing supply tightness. In Shanghai, physical silver premiums remain elevated at approximately $6 to $8 per ounce above COMEX prices, a level that suggests strong demand relative to available supply.

These premiums reflect sustained industrial consumption, particularly from the solar energy and electric vehicle (EV) sectors, where silver is a critical input. The combination of rising clean energy deployment and constrained supply has been a central driver of silver’s longer-term strength.

Implications for traders and the market

Deriv’s analysis suggests that while short-term price corrections are likely during periods of low liquidity, the broader structural drivers supporting silver prices remain intact. Traders are closely monitoring both macro conditions and physical market signals to gauge whether the recent rebound can extend into the new year.

Deriv provides access to a range of global markets, including precious metals, allowing traders to respond to both technical movements and fundamental developments. As liquidity returns after the holidays, market participants will be watching whether silver can regain momentum or consolidate below recent highs.

Earlier, we reported that Deriv 2025 Audit Card highlights reflection over reports.

This material may contain third-party opinions, none of the data and information on this webpage constitutes investment advice according to our Disclaimer. While we adhere to strict Editorial Integrity, this post may contain references to products from our partners.
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