Silver hasn’t looked particularly healthy over the past few weeks, and I understand why that makes traders nervous.
When prices keep drifting lower, it’s natural to wonder whether the story has changed. But when I step back and compare today’s action with what history has shown us, I see something much different.
To me, this looks less like the beginning of a major breakdown and more like a familiar seasonal pattern that’s played out time and time again.
The Fundamentals Still Favor Higher Prices
Silver (SLV) is trading near its 65-week moving average, an area I’m watching closely because it has acted as meaningful support before.
More importantly, I don’t see anything in the physical silver market that justifies the recent weakness.
Demand continues to exceed mine production, and that imbalance hasn’t gone away.
Silver remains essential for manufacturing, renewable energy projects and an expanding list of AI-related technologies, from high-performance servers to advanced chips and sensor systems.
Those industries aren’t slowing their consumption simply because the price pulled back over the last few weeks.
That’s why I believe the fundamentals remain much stronger than the chart alone would suggest.
Seasonality Matters More Than Most Traders Realize
One of the most consistent tendencies in silver is its habit of bottoming during August before strengthening into September.
Whether you study the shorter-term seasonal averages or look back over multiple decades, the pattern is remarkably similar.
Weakness develops through the summer, buyers gradually return in August and momentum often improves as September begins.
Of course, no seasonal pattern is guaranteed to repeat. Markets always have the final say.
But when historical tendencies line up with supportive fundamentals and a key technical level, I pay attention.
That’s exactly where we are today.
Instead of assuming every pullback signals the start of something worse, I prefer to ask whether it’s creating an opportunity.
Right now, that’s the question I’m watching most closely as silver works through what has historically been its weakest stretch of the year.
Geof Smith
Geof Smith Trading
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