Silver's rise may seem unreasonable, but some short-term warning signs may not be ignored. Silver is a close relative of gold with a high beta value. A model that acknowledges this intrinsic characteristic shows that the implied value of silver is 56.25 US dollars per ounce, which is more than 20 US dollars lower than the current price of around 78.70 US dollars. The Chicago Mercantile Exchange's move to raise margin requirements failed to contain silver's gains, but the metal is rapidly approaching the overbought region. Like gold, it also faces potential risks from the impending adjustment of the Bloomberg Commodity Index. There is no sign that this seemingly intense round of speculation will stop any time soon, but investors should keep in mind that the silver market is far weaker and less liquid than the gold market. This means that once adjustments are made, the process can be both rapid and painful.

Silver's rise may seem unreasonable, but some short-term warning signs may not be ignored. Silver is a close relative of gold with a high beta value. A model that acknowledges this intrinsic characteristic shows that the implied value of silver is 56.25 US dollars per ounce, which is more than 20 US dollars lower than the current price of around 78.70 US dollars. The Chicago Mercantile Exchange's move to raise margin requirements failed to contain silver's gains, but the metal is rapidly approaching the overbought region. Like gold, it also faces potential risks from the impending adjustment of the Bloomberg Commodity Index. There is no sign that this seemingly intense round of speculation will stop any time soon, but investors should keep in mind that the silver market is far weaker and less liquid than the gold market. This means that once adjustments are made, the process can be both rapid and painful.