2025 Silver Market Rally: Société Générale Forecasts Continued Volatility but No Bubble

The December 30, 2025 Kitco News article [0] presents Société Générale’s perspective on the silver market after a record-breaking 2025 performance. Silver futures surged 153% year-to-date (YTD), with a 33% December rally before peaking above $80/oz, then suffering the largest single-day drop (8.7%) since 2021 [2][3]. This correction was triggered by CME Group’s increase in margin requirements for certain Comex silver futures contracts, which forced speculative position closures [2][4].

The rally’s drivers include macroeconomic factors (Fed rate-cut expectations and a weaker U.S. dollar supporting precious metal demand) and microeconomic fundamentals (a structural supply deficit from strong industrial demand in solar energy, electric vehicles (EVs), and AI infrastructure [1][2]). Silver’s unique dual role as both a safe-haven precious metal and critical industrial component amplifies its volatility compared to other commodities.

Société Générale’s conclusion that the market is not a bubble is rooted in distinguishing speculative mania (a bubble’s hallmark) from fundamental support. Unlike a bubble, which lacks underlying economic drivers, silver’s rally is backed by real demand and supply imbalances. The CME’s margin hike is a standard regulatory measure to mitigate excessive leverage and market disruption, not an indicator of a bubble [4].

1. Silver’s dual status as a precious and industrial metal is a primary volatility driver, as it responds to both safe-haven sentiment and industrial demand fluctuations.
2. The 2025 rally is fundamentally driven (supply deficits, industrial growth) rather than speculative, contrasting with historical bubble dynamics.
3. Société Générale’s non-bubble assessment may reassure long-term investors, while the CME’s margin hike could reduce excessive short-term speculation.
4. Geopolitical tensions and Fed policy will remain critical factors influencing silver’s price volatility in the near term.

• Ongoing volatility may lead to cautious trading strategies and increased risk management efforts for short-term investors [0].
• High and volatile silver prices could raise costs for industrial users (solar, EV, AI sectors), potentially prompting research into alternative materials [2].
• Uncertainties in Fed rate-cut timing and geopolitical developments may trigger sudden price swings [1][2].

• The structural supply deficit and growing industrial demand suggest long-term price support beyond short-term volatility [1].
• Société Générale’s non-bubble assessment may attract sustained investment from long-term asset allocators [0].
• Increased market attention could enhance liquidity in silver-related instruments.

Silver’s 2025 performance included a 153% YTD rally (33% in December) that peaked above $80/oz, followed by an 8.7% single-day drop after the CME increased margin requirements. The rally was driven by Fed rate-cut expectations, a weaker U.S. dollar, geopolitical tensions, and an industrial demand-driven supply deficit. Société Générale forecasts continued volatility but no bubble, citing fundamental support. Silver’s dual role as a precious and industrial metal amplifies its volatility, with sectors like solar, EVs, and AI critical to long-term demand. The CME margin hike is a regulatory risk management measure, not a bubble indicator.