Home / Business and Economy / Silver Plunges 30%: Is More Pain Ahead?
Silver Plunges 30%: Is More Pain Ahead?
31 Jan
Summary
- Silver experienced a historic drop of over 30% on Friday.
- Analysts are monitoring market signals for further potential declines.
- Underlying inflation and dollar strength may keep silver elevated long-term.
Silver experienced a significant and historic plunge exceeding 30% on Friday, a sharp correction after a year of substantial gains. This dramatic sell-off occurred as the US dollar strengthened and investors reacted to a key Federal Reserve appointment. Analysts, including longtime commodities expert Jeffrey Christian of CPM Group, are now vigilant for specific market signals that could suggest the price drop is not over.
Christian indicated he is observing measures of trading momentum in silver, bonds, and related ETFs. He also noted that rising inventories could further dampen silver's momentum, pointing to a narrowing supply-demand imbalance and potential increases in silver mining output. High open interest in silver futures contracts, particularly for March 2026 COMEX contracts, has supported recent prices, but a fall in open interest could remove upward pressure.
Despite the recent volatility, Christian believes that overarching concerns about inflation and the US dollar's strength will continue to drive investors toward silver as a safe haven, potentially keeping prices elevated or even increasing them through 2026. However, he cautioned that in a worst-case scenario, silver's price could fall further to $68 an ounce, implying an additional 17% drop from Friday's late afternoon levels.
