From $121 to the Low $80s: Volatility Hits the Silver Market

Silver has experienced sharp price swings over the past few weeks, moving from a steep decline at the end of January to a notable recovery in February, before entering another wave of losses in early March. These rapid movements have created uncertainty among investors, particularly given the contrast between short-term market reactions and the relatively stable outlook maintained by major financial institutions.

Sharp Fluctuations Within Weeks

Silver reached a historic all-time high of $121.64 per ounce on January 29 before suffering a rapid collapse shortly afterward. Part of the decline followed the announcement by U.S. President Donald Trump nominating Kevin Warsh to lead the Federal Reserve, which triggered a strong rise in the U.S. dollar.

At the same time, CME Group raised margin requirements for silver futures during the same weekend, setting off a wave of forced selling in the futures market.

As a result, silver futures closed on January 30 with a 31.4% single-day decline, the largest daily loss since the market turmoil of March 1980.

This sudden drop brought the previous rally to an abrupt end, pushing the market into a phase dominated by liquidity conditions and technical factors.

Recovery in February Followed by Another Correction

During February, silver began a gradual recovery as selling pressure faded and buyers returned to the market. The metal gained more than 10% during the month, climbing to nearly $95.85 per ounce in early March, recovering a large portion of the earlier losses.

However, the rebound did not last long. In the first week of March, silver experienced another abrupt correction, losing nearly 10% within 48 hours and falling back to the low $80 range per ounce.

Stronger Dollar Weighs on Silver Again

Recent data indicate that the latest decline was driven by a stronger U.S. dollar and reduced expectations of interest rate cuts by the Federal Reserve, which pressured precious metals broadly.

Notably, this downturn does not appear to stem from changes in the fundamental outlook for silver. Instead, it was largely influenced by macroeconomic forces, including currency movements, interest-rate expectations, and futures market mechanics. This environment makes short-term price interpretation particularly difficult.

Major Banks Maintain Their Silver Forecasts

Despite the sharp volatility, several major financial institutions have maintained their long-term outlook for silver.

J.P. Morgan expects an average price of $81 per ounce in 2026, with potential spikes above that level during periods of strong investment inflows.

Deutsche Bank believes silver could reach $100 by the end of the year, noting that silver often outperforms gold during the later stages of precious-metal bull markets.

Citigroup holds a more bullish view, projecting $150 per ounce by the second quarter of 2026.

Meanwhile, UBS points to continued supply deficits supported by strong industrial demand from solar energy, electronics, and electrification sectors.

A Market Between Structural Deficit and Short-Term Nervousness

Recent developments show that the silver market currently stands at a delicate balance point. On one hand, the latest price movements highlight how sensitive the metal remains to changes in the U.S. dollar, interest-rate expectations, and futures-market dynamics. On the other hand, the core long-term outlook among major institutions remains unchanged.

This suggests that the current market behavior may represent a phase of heightened volatility within a broader long-term bullish trend, rather than a fundamental deterioration in silver’s outlook.

For investors, the key question now is not only where silver will move next, but also which forces will dominate the market: renewed macro-driven selling pressure or a return of investment inflows supported by unchanged fundamentals.