The silver market is experiencing one of the most volatile periods of the past decades. In late January 2026, prices skyrocketed to an all-time high, briefly reaching $120 per ounce, following an impressive rally that pushed the metal up by roughly 65% within the same month.

However, this explosive rise proved short-lived. The market reversed sharply, with silver posting its worst single-day drop since 1980, as investors rushed to lock in profits after the extremely rapid ascent. At the same time, the correction accelerated as sentiment around U.S. monetary policy shifted, triggering a broader sell-off across precious metals.

In price terms, the pullback was dramatic: from levels above $120, silver fell to around $83 per ounce, a drop of nearly 30% in a very short time. In some trading sessions, losses were even steeper—reaching approximately 36%—as the market swung from euphoria to mass liquidations.

Despite the violent correction, the picture is not entirely negative. In recent days, a rebound has been observed, with prices strengthening due to bargain hunting and renewed investor positioning, indicating that demand remains active. Analysts caution, however, that signs of further downside pressure remain if the market is still viewed as “overheated” following the recent rally.

Overall, the recent move looks more like an aggressive but largely expected correction after a parabolic rise, rather than the start of a prolonged collapse. Silver remains at historically high levels, but its path suggests that 2026 will be a year of sharp swings—not linear gains—for precious metals.

What analysts are saying

The recent drop of more than 30% in silver prices pushed the metal lower for the first time since 2022, but the move has not shaken all investors’ confidence in silver’s longer-term dynamics.

“I tend to ignore traditional percentage-decline metrics,” said Peter Grant, Vice President and Senior Metals Strategist at Zaner Metals, adding that he is “not fully convinced that silver is in a downtrend”—even if that may technically be the case.

Grant is not alone. Other analysts have pointed to silver’s dramatic rise as evidence that the precious and industrial metal is unlikely to remain in a downward trend for long.

Both gold and silver had risen to such “extreme levels” that Grant said it was still too early to declare that prices had bottomed. However, he noted that stabilization would allow markets to reassess conditions, adding that underlying trends remain bullish, particularly the ongoing trend toward de-dollarization.

The transition from record highs to bear-market territory took just four trading sessions—a pace last seen in 2011.

MarketWatch

Although silver has technically entered a bear market, John Caruso, Senior Market Strategist at RJO Futures, argued that it is misleading to describe silver as being in a bear market.

The metal “simply rose by an outrageous percentage over the past 12 months,” he said, noting that silver is trading at more than double its price from a year ago.

Caruso added that the recent pullback in gold and silver may have been a “vote of confidence in Kevin Warsh and the independence of the Federal Reserve,” but suggested the market may be overlooking the fact that “the power of money printing appears to have shifted in recent years to Congress, away from the Fed.”

“There is still a budget deficit of nearly 6%, with no signs of recession or war, and no clear end in sight,” he said—conditions that could continue to support metals like gold and silver as safe-haven assets.

It is still too early to determine where silver prices will bottom, Edward Meir of Marex told MarketWatch. Prices could fall to $50 per ounce before reaching a low, he said, “but no one really knows.”

For now, the market has not yet reached equilibrium, and margin-related selling—along with other characteristics of futures markets—suggests it may take more time for conditions to stabilize, according to Brien Lundin, editor of the Gold Newsletter.

Fundamental drivers related to debt and dollar depreciation—the so-called “debasement trade”—remain firmly in place, Lundin said. “We absolutely needed to rein in the euphoria in metals, and this will give us a more stable base going forward.”

“The underlying trend for metals remains bullish,” he added. “This correction has created some excellent—but temporary—opportunities.”

Edited by: Nikos Ventourakis