Analysts warn of a possible sudden drop in silver prices – SPE

January 27, 2026
Lior Kahana and Emiliano Bellini

The price of silver has risen dramatically in recent months and today surpassed an all-time high of $110 per ounce (oz). However, according to two leading analysts, this upward trend could reverse sharply in the coming days or weeks.

“I think silver will reach a high this year that will last for years. When the price moves this quickly, the shortages reverse,” said Mike McGlone, Senior Commodity Strategist at Bloomberg Intelligence. pv magazine.

With silver likely to hit a major cyclical peak this year, the forces driving the shortages could be reversing. High prices can weaken demand, encourage additional supply and put an end to speculation, often turning perceived shortages into surpluses.

“Of the 855 months in our database since 1954, silver has risen past its current premium of 3.8x to its 60-month moving average only three times – December 1979 and in January and February 1980. The average price was $34, the high was almost $50, and $3.56 marked the low in 1993. Last year’s low was about $28. The ‘devil’s metal’ seems well on its way to causing pain in both shorts and longs,” McGlone added.

Rhona O’Connell, head of market analysis, EMEA & Asia at StoneX, said investors could soon reconsider their rush to silver.

“Silver is in the midst of a self-propelled frenzy and, with many geopolitical risks adding further buoyancy to gold, silver is even now benefiting from the lower unit price, despite the gold:silver ratio now at its lowest point in over 14 years,” she said. pv magazine.

“We are in dangerous territory because I fear some people are entering the market at this level without any proper understanding of the fundamentals,” O’Connell added. “I call silver Cinderella. She spends a long time under the stairs, usually when gold isn’t moving. But when she goes to the ball, usually thanks to a rising gold price, she lets everyone in. But at midnight she leaves faster than she arrived. And that’s almost always how the price of silver works. When it starts to fall, it can be just as steep as the rise – the almost vertical moves we’re seeing now.”

O’Connell explained that the main cause of the silver price increase was market concern about possible U.S. tariffs or quotas on silver as a designated critical mineral. These fears pushed COMEX inventories from a typical 9,000 to 10,000 tonnes in 2024 to more than 16,000 tonnes by mid-2025, as risk managers hesitated to release metal abroad while other participants rushed to bring silver into the US.

Further price increases are unlikely, O’Connell added, ruling out a $150/oz milestone. “$100 is unlikely enough, and I don’t believe this can be sustained,” she said. “Consumers have chased the market, so if it stops, we could easily see a backlash. If that happens, it could be disastrous.”

O’Connell also emphasized that silver supplies cannot increase quickly. Only faster recycling of industrial scrap or sales by investors can bring additional metal onto the market in the short term. It takes months or even years for mine production to adjust, and only 28% of silver comes from primary silver mines.

The remaining 72% is produced as a byproduct of lead, zinc, copper and gold mining, meaning supply is largely tied to the production schedules of those metals and makes the silver market relatively inflexible and vulnerable to shortages if demand surges.