Silver prices have surged dramatically in recent months, crossing another all-time high today at $110 per ounce (oz). However, according to two leading analysts, this upward trend could reverse sharply in the days or weeks ahead.
“I think silver will put in a high this year to last for years. When price shifts at such high velocity, deficits reverse,” Mike McGlone, Senior Commodity Strategist at Bloomberg Intelligence, told pv magazine.
With silver likely to reach a major cyclical peak this year, the forces driving shortages could begin to flip. High prices may weaken demand, encourage additional supply and trigger speculative unwinding, often turning perceived deficits into surpluses.
“Of the 855 months in our database since 1954, silver has stretched beyond its current 3.8× premium 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 near $50, and $3.56 marked the low in 1993. Last year’s low was about $28. The ‘devil’s metal’ appears well poised to inflict pain on both shorts and longs,” McGlone added.
Rhona O’Connell, Head of Market Analysis, EMEA & Asia at StoneX, said investors may soon reconsider their rush into silver.
“Silver is in the midst of a self-propelled frenzy and, with plenty of geopolitical risk giving gold added buoyancy, silver is benefiting even now from its lower unit price, notwithstanding that the gold:silver ratio is now at just over 14-year lows,” she told pv magazine.
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“We are in dangerous territory as I fear that some people are climbing into the market at these levels without any solid grasp of the fundamentals,” O’Connell added. “I refer to silver as Cinderella. She spends a long time below stairs, usually when gold isn’t moving – but when she goes to the ball, usually courtesy of a rising gold price, she entrances everyone. But at midnight, she leaves faster than she arrived. And that is almost always how the silver price works. When it starts coming off, it could be as precipitous as the rise – the near-vertical movements we are seeing now.”
O’Connell explained that the main driver of the silver price surge has been market concerns over potential U.S. tariffs or quotas on silver as a designated critical mineral. These fears pushed COMEX inventories from a normal 9,000 to 10,000 tonnes in 2024 to more than 16,000 tonnes by mid-2025, as risk managers hesitated to release metal overseas while other participants rushed to bring silver into the U.S..
Further price increases are unlikely, O’Connell added, ruling out a $150/oz milestone. “$100 is implausible enough, and I don’t believe it can be sustained,” she stated. “Consumers have been chasing the market, so when that stops, we could easily see a recoil. When it goes, it could be calamitous.”
O’Connell also emphasized that silver supply cannot ramp up quickly. Only faster recycling of industrial scrap or selling by investors can put additional metal into the market in the short term. Mine production takes months or even years to adjust, and only 28% of silver comes from primary silver mines.
The remaining 72% is produced as a by-product 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 rises sharply.
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