Silver prices have dropped sharply after hitting record highs earlier this week, raising concerns among analysts about a prolonged downturn in the white metal. After touching an all-time high of $82.67 per ounce, the international COMEX silver rate dropped 14% in just a few sessions to nearly $71.30 per ounce at press time.
Silver had staged an extraordinary rally in 2025, gaining nearly 180%, driven by tight supply conditions and a surge in industrial demand. The metal benefited from disruptions in supply from key exporters like Peru and Chad, geopolitical tensions in the US and Venezuela, and restrictions on Chinese silver exports starting in January 2026.
Rising interest from battery manufacturers and renewable energy players also supported prices. However, experts say the recent correction reflects aggressive profit booking after an unsustainable bullish rally.
Market specialists warn that elevated silver prices may hurt its long-term industrial demand. According to analysts, industries typically seek alternatives when raw material costs rise too sharply. Solar panel manufacturers have already shifted from silver to copper, while battery makers are exploring copper-based binding solutions.
Some experts point out that even solid-state battery technology, once seen as a major driver of silver demand, is gradually reducing its dependence on the metal. This structural shift could weaken silver’s demand outlook over the coming years.
Analysts are also drawing parallels with past silver bull cycles. In 1980 and again in 2011, silver prices witnessed steep crashes, falling as much as 75% after strong rallies. Rising margin requirements and liquidity tightening played a key role in the declines, a pattern some experts believe could repeat if prices remain elevated.
Also Read: Will Gold and Silver Set Fresh Highs in 2026? Outlook and Price Forecasts
While short-term volatility may push silver prices higher due to institutional short covering, some analysts believe any further rise could be capped near $100 per ounce by early 2026. Forecasts may turn bearish beyond these levels.
By the end of FY27, silver prices could potentially fall to $35 - $40 per ounce, implying a downside risk of up to 60% from peak levels. Given this outlook, experts advise retail investors to be cautious and avoid fresh long positions until price stability returns.