Trading Spot Silver

Research Notes January 2026 > https://www.unum.capital/post/rjan2026

Trade Local & Global Financial Markets with Unum Capital.

To get started, email tradingdesk@unum.co.za

Tuesday, 27 January 2026

Time: 11h46

Closing Price: $112.92

1D Change: +8.87%

Multi-Frame Action: 🟢 Parabolic (D) 🟢 Vertical (W) 🟢 Vertical (M)

Technical Upside: Blue Sky Breakout. Trading in a vacuum with no historical resistance.

Target: $120.00 – $125.00. Psychological Magnet / Momentum Extension.

Momentum Signal: "Lock-Out" Extreme.

Risk / Invalidation: Close below $100.00 (Psychological Breakout Level).

Valuation Basket: Short Squeeze / Monetary Debasement / Industrial Panic

Primary Driver: "Silver Squeeze" dynamics, aggressive catch-up trade to Gold, and industrial inventory panic.

MARKET STRUCTURE & VOLUME VALIDATION

Volume Profile: The price action is effectively vertical, indicating a total collapse of sell-side liquidity. This is a classic "melt-up" scenario where short sellers are forced to cover at any price, and buyers are panic-bidding to secure exposure. The move from $50 to $112 has occurred with almost no consolidation, signaling extreme urgency.

Liquidity Zones: The $100.00 level is now the critical psychological floor. Below that, the previous breakout point around $80.00 serves as structural support. However, in this vertical phase, technical support levels are less relevant than flow dynamics.

Divergences: None. Price and Momentum are synchronized in a historic extension. The Monthly RSI reading of 99.99 is a statistical anomaly, suggesting that the asset is currently being driven purely by flow mechanics (a liquidity vacuum) rather than fundamental valuation.

MOMENTUM PROFILE (WEEKLY)

Tactical Momentum: Extreme Overbought. The Weekly RSI is at 98.02. In standard analysis, this is "overbought," but in a parabolic squeeze, it signals that the market is "locked" limit-up, forcing chasing behavior.

Fast Weekly: Strong. The Daily chart confirms the intensity with an RSI of 99.03 and a daily gain of nearly 9%, showing accelerating velocity even at these altitudes.

Structural Trend: Bullish Breakout. The monthly chart shows a clean break from the multi-decade consolidation, releasing significantly pent-up energy.

Primary Trend: Bullish. Silver is outperforming Gold (High Beta), confirming a "Risk-On" commodity super-cycle.

CORE THESIS Silver is experiencing a historic repricing event, characterized by a "Super-Spike" or "Melt-Up." The RSI readings (hitting the mathematical ceiling of 99.99) indicate a complete absence of sellers. This is likely driven by a combination of industrial panic buying and a monetary "run to hard assets." While volatility will be extreme, fading this move is highly dangerous. The trend remains violently up until a daily close confirms a reversal candle (e.g., a bearish engulfing). The $120-$125 zone is the next logical magnet for this runaway momentum.

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Previous Post (10 June 2025)

Money Flow at multi-month highs.

Here's a breakdown of the current price action:

• The 7-day trend is indicated as "High Bullish Momentum / Approaching Overbought," while the 14-day trend is "Very Bullish."

• Comparison: Both the short-term (7-day) and slightly longer short-term (14-day) trends indicate upward momentum ("High Bullish Momentum / Approaching Overbought" and "Very Bullish" respectively). This suggests a consistent buying pressure across these timeframes. The "Very Bullish" 14-day trend reinforces the "High Bullish Momentum / Approaching Overbought" 7-day trend, indicating that the recent strength is part of a broader upward movement.

Potential Trading Approach:

• Short Term (Approximately Next 1 to 10 Trading Days): The model notes, "Aggressive Buying Wait For Pullback To Enter Next-Alternatively If The Highs Fail To Hold Then Short Back To The 8 Or 21-EMA."

  • Approach: While there is aggressive buying, the recommendation is to wait for a pullback before entering. Alternatively, if the highs fail to hold, consider shorting back to the 8 or 21-period Exponential Moving Average (EMA).

• Medium Term (Approximately Next 2 to 4 Weeks): The model indicates "Aggressive Buying But Do Not Chase-Look For Overshoot or Failure To Hold Prior Session Range Highs To Short-Sell Back To The 8-EMA."

  • Approach: The medium term suggests aggressive buying, but cautions against chasing the price. Instead, look for potential short-sell opportunities if the price overshoots or fails to hold above the prior session's high, targeting a move back down to the 8-period EMA.

• Long Term (Approximately Next 5 to 8 Weeks): The model states, "Has Resumed A Bull Move In A Strong Upward Trend."

  • Approach: The long-term perspective indicates that SPOT SILVER has resumed a strong upward trend. This suggests a continued bullish bias over the next 5 to 8 weeks.

Overall Trading Considerations:

• Consistent bullish momentum: Both short and slightly longer short-term trends are bullish, supporting upward price action.

• Short-term caution: Despite the buying pressure, the model advises against chasing and suggests looking for short-sell entries on weakness relative to the prior session's high or waiting for a pullback.

• Medium-term aggressive buying with a caveat: The medium term reinforces aggressive buying, but highlights the importance of not chasing and considering short-sell opportunities on overshoots or failures at prior session highs.

• Long-term strong upward trend: The long term clearly indicates a resumed bull move in a strong upward trend.

In summary the current view is bullish across all timeframes, with a long-term strong upward trend. However, short-term and medium-term traders should be cautious of potential overshoots and failures at prior session highs for tactical short opportunities or wait for pullbacks for long entries.

Lester Davids

Senior Investment Analyst: Unum Capital