On Friday, risk assets rallied broadly amid optimistic signs regarding the Middle East situation. Spot silver surged 3.27% to $80.9822 per ounce, marking a weekly gain of 6.74% as it climbed from $72.6369 to $83.0538. COMEX silver futures rose 3.09% to $81.720 per ounce, up 6.04% for the week, trading within the range of $73.175 to $83.835.

Analysts indicate that after significantly lagging behind the broader rebound in risk assets, silver is now breaking through key price levels and exhibiting early signs of recovery in positioning, Capital Flows, and volatility. What began as a purely technical breakout is increasingly aligning with wider cross-asset shifts—rising risk appetite, declining volatility, and a resurgence in speculative sentiment.

Silver Breaks $80

Buoyed by news of the Strait of Hormuz reopening, silver accelerated its advance, shattering the key resistance level at $80. This breakthrough not only propelled prices well above the prior downtrend line but also reclaimed the 50-day moving average.

Earlier this year, silver transformed into a barometer of risk appetite. Should this trend persist, some capital may rotate into this asset. Charts reveal a significant divergence between the Nasdaq 100 Index and silver.

Positioning Remains Extremely Light

Weekly position changes in silver ETFs are beginning to show signs of life, although overall holdings remain quite light.

Silver vs. VIX and MOVE

The last time the VIX plummeted sharply marked the start of a major silver short squeeze. While this instance is not identical, the current environment of heightened risk appetite and fading panic could spread, triggering a new wave of buying for assets like silver.

The latest sharp decline in MOVE—the bond market's fear gauge—has triggered ripple effects across multiple asset classes, including silver. The chart below compares the price action of silver against the MOVE index (inverted).

The silver volatility index (VXSLV) has retreated from panic highs, yet remains elevated over longer-term horizons. Should the short squeeze intensify further, demand for call options is expected to surge, providing support for volatility.

Speculative Sentiment Rekindled

Silver and South Korea's KOSPI once exhibited similar speculative characteristics, with both bubbles bursting rapidly—yet speculative trading in Korean stocks has since returned.

Silver remains one of the core raw materials for AI infrastructure development. AI-related stocks (AIQ) have recently experienced a short squeeze, while silver continues to trail significantly behind.