The question of whether silver is in a bubble is dominating investor discussion. French bank Societe Generale said on Dec. 30 that its quantitative models flag bubble-like behavior in silver prices, setting up a deeper debate over how those signals should be interpreted.

Societe Generale’s commodity research team, led by Head of FIC & Commodity Research Dr. Mike Haigh, applied its Log-Periodic Power Law Singularity (LPPLS) framework, a quantitative model designed to detect super-exponential price acceleration often associated with late-stage market instability.

“When we saw a near-vertical move above $80/oz last week, it naturally looked dramatic, perhaps emotionally driven, and, in some people’s view, resembling a bubble,” the analysts stated, adding:

However, the moment you switch to a time series plot on a logarithmic scale (lower RHS), the narrative changes, as the run-up looks much more stable and not unprecedented.

They further explained that chart construction materially alters perception of risk, noting: “The logarithmic scale is the correct baseline because it clearly reveals the underlying exponential trend.”

While the LPPLS framework does classify the current silver regime as a potential bubble, Societe Generale’s analysts emphasized that model outputs should not be treated as forecasts in isolation. Underscoring that quantitative diagnostics cannot fully account for regime shifts shaping precious metals markets, the team cautioned:

If one were to rely solely on this model, we could claim that the silver market is in a bubble. We firmly warn against this.

Read more: Peter Schiff Says Silver Breaks $100 Next Year Despite Possible Sharp Pullbacks

Societe Generale’s research further highlights that silver’s smaller and less liquid market structure compared with gold increases susceptibility to herding behavior, feedback loops, and amplified volatility, which can trigger bubble signals without implying a lasting reversal. The analysts said:

We therefore prefer to interpret the ‘bubble’ regime as potential instability indicators, as we would always expect healthy corrections to extreme price moves.

They also observed that charting silver on a logarithmic basis places the 2025 rally within a 25-year compounding trend, even though the magnitude of this year’s advance appears exceptional. “The log scale always tells a better story and is closer to the truth,” the team remarked.

Beyond technical models, Societe Generale pointed to fundamental drivers sustaining silver demand, including de-dollarization trends, elevated geopolitical uncertainty, and tightening physical supply. The bank highlighted China’s planned export restrictions starting Jan. 1, noting the country supplies 60% to 70% of refined silver globally and could reduce exports by up to 30%, exacerbating persistent annual deficits estimated at 200 million to 230 million ounces. While volatility remains elevated following sharp pullbacks from record highs, the analysts do not expect their bubble framework to forecast a fundamental shift in silver’s broader upward momentum.

• Why did Societe Generale flag silver as a potential bubble?
  Its LPPLS quantitative model detected super-exponential price behavior often associated with market instability.
• Does Societe Generale expect silver prices to crash?
  No, the bank explicitly warns against viewing the bubble signal as a forecast of an imminent collapse.
• How does silver’s market structure affect price volatility?
  Silver’s smaller and less liquid market makes it more prone to herding, feedback loops, and sharp swings.
• What fundamentals are supporting silver demand in 2025?
  De-dollarization, geopolitical risk, supply deficits, and China’s export restrictions are key drivers.

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