(Kitco Commentary) - Silver is continuing it's pattern of higher highs and lower lows, as it somewhat cools down it's parabolic ascent after touching the 1.618 Fibonacci extension, which was always the most likely spot for some kind of retracement.
I have adjusted the plotting of the Fibonacci extension (shown below) slightly from my last piece, to be more precise on the October 2025 swing high point at $54.50, further revealing the importance the 1.618 extension. My last piece was written the afternoon of Sunday December 28 (published Monday December 29 https://www.kitco.com/opinion/2025-12-29/silver-squeezes-high-blue-skies) a few hours before a CME margin hike, which was the catalyst for the hard pullback from 1.618 seen in the wicked Monday December 29 candle.
All said: Silver is now trading above the 1.618 level, having broken through it's overhead resistance at $83.7, increasingly the likelihood of price extension toward the 2.618 level just over $100.00. note that daily stochastics still have plenty of room overhead.
The gold to silver ratio is showing concrete signs of imminent breakdown, adding to the bull case for silver. Opposite to silver: it's continuing its pattern of lower highs and lower lows, it's breaking down from a bearish continuation pattern, and daily stochastics are just starting to turn down from the overbought level.
It looks increasingly like the ratio is setting up for a test of decades long support in the low 40's.
But brace for further volatility.
