Silver price rallies 3.1% setting up for CTA buying trigger and bullish momentum
Silver sees biggest daily gain since 2025
Silver price has demonstrated remarkable strength in 2025, marking a third consecutive day of gains on Thursday by breaking through the critical resistance at $31.50 to hit a high of $31.70.
This surge not only represents the metal's largest single-day increase of 3.1% since Donald Trump's inauguration, but it also signals the potential for further upward movement. However, the market saw some volatility on Friday, with silver dipping below $31.50 in the Asian session by over 1.5%, only to recover in the European session, now challenging to reclaim and surpass this pivotal level.
The recent price action in silver futures markets is particularly noteworthy because it could trigger significant buying from Commodity Trading Advisors (CTAs). A break above $31.50 per ounce would compel CTAs to increase their positions by at least 4% of their maximum size, setting the stage for a self-reinforcing cycle of buying. Unless there's a dramatic reversal, CTAs are likely to continue adding to their silver holdings in the near term, potentially attracting further discretionary trader interest.
This interest might be especially pronounced given that gold prices have been pushing towards new record highs, and despite some evidence of involvement in Exchange for Physical (EFP) dislocations, discretionary traders seem directionally neutral, which could shift with silver's momentum.
$31.50 remains pivotal for silver near-term price movement
Silver price dynamics (December 2024-January 2025). Source: TradingView.
From a technical perspective, the Relative Strength Index (RSI) for silver remains in bullish territory, supporting expectations of continued upward potential. A decisive break above $31.50 would likely see silver aiming for the December 2024 high of $32.30.
Silver's performance this week, combined with the strategic importance of the $31.50 level and the potential for increased CTA buying, paints an optimistic picture for the metal's near-term price outlook.
Silver rose above $31.00 on January 30th, breaking a 7-week high in January 2025. This surge followed a series of consecutive higher closes, signaling potential for further gains.
