LIVE MARKETS-Are silver bells actually ringing at a top?

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ARE SILVER BELLS ACTUALLY RINGING AT A TOP?

The “debasement trade” previously peaked in October of last year, but it has subsequently experienced a resurgence in early 2026.

According to Mike O'Rourke, chief market strategist at JonesTrading, the weakening U.S. dollar - in anticipation of yen intervention - has been the primary driver.

Indeed, the Japanese yen recently tested its 2024 lows, and JGB yields are at record or three-decade highs.

"The Japanese government and the Bank of Japan have stimulated their economy into a precarious position. These developments have somehow manifested themselves in a meme-like move in silver here in 2026," writes O'Rourke in his "Closing Print" letter out late Monday.

At its peak on Monday, spot silver XAG= was up 65% for the month.

As O'Rourke sees it, as bitcoin BTC= has corrected, crypto speculators believing in debasement found precious metals ripe for squeezing. He notes that since the debasement trade speculation peaked in the second week of October last year, bitcoin dropped as much as 33% over the following month and has struggled since.

In O'Rourke's view, the premise behind the debasement trade is the loss of faith in governments.

"For years, Bitcoin was hailed as the magic bullet for this. Since October, bitcoin’s trading activity has made it clear that it is simply a highly volatile risk asset," he writes.

In October, when debasement trade talk was peaking, O'Rourke says a number of developments drove the loss-of-confidence-in-government narrative, including the U.S. government shutdown. Additionally, the Federal Reserve restarted its easing cycle.

While O'Rourke admits that many of October’s issues still persist, he says the U.S. economic outlook is decidedly different given that the U.S. labor market has held steady. Q4 GDP appears on pace to print above 5%, and expectations for FOMC easing have been scaled back.

These developments push back hard against U.S. debasement. The only exception he sees in favor of it is that the Fed has resumed asset purchases to avoid a liquidity squeeze.

O'Rourke's bottom line is that, "On balance, if the U.S. economy sustains the recent trends, they don't paint a picture of debasement. The questionable debasement narrative in October resulted in Bitcoin's downturn; we expect the far more questionable debasement narrative today to result in silver's downturn."

(Terence Gabriel)

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