Silver Future Trend: Short-term Fluctuations Mask Long-term Opportunities

On December 29th, the market witnessed a dramatic turn—silver, which had been leading in gains, sharply reversed and experienced a clear correction, with prices dropping rapidly from $83.9/oz to $74.6/oz, an intraday fluctuation of over 8%. Gold also declined simultaneously, breaking below the $4,500 level. What is the hidden story behind this sudden pullback?

Short-term decline does not indicate a deterioration in fundamentals

On the surface, the market reacted to news of the Russia-Ukraine negotiations “approaching an agreement,” but analysts generally believe this is merely a technical correction trigger rather than the fundamental reason. In fact, the recent adjustment after silver’s rebound is a normal technical retracement—consecutive days of overbought conditions have already planted risk hazards, and short-term profit-taking by investors has become a driving force.

UBS pointed out that liquidity exhaustion at the end of the year further amplified price volatility. The precious metals trading environment has shifted from a “moment of breaking new highs” to a “period of clearly rising risks,” making short-term trends difficult to predict.

Why has silver outperformed gold by a large margin

Since early 2026, silver has risen a total of 171%, leading gold’s 70% increase. There are deep logical reasons behind this divergence.

First is the difference in market structure. The silver market is relatively small, with tightening inventories and liquidity that can easily dry up, which makes it more sensitive to supply and demand changes. In contrast, the London gold market holds about $700 billion worth of lendable gold bars as a liquidity buffer, while silver lacks a similar stable reserve mechanism.

Second is macro-driven momentum. Fiscal expansion and currency depreciation expectations are prompting investors to reallocate their precious metal assets, and supply-side tensions further reinforce the upward logic for silver.

Three forecasts for silver’s future trend

Market analysts offer different perspectives on silver’s future:

Forecast 1: Entering a period of balanced volatility
Macro strategist Lyn Alden believes that silver may challenge the $100 mark by 2026, but the “asymmetric trading pattern of low risk and high return” has ended. As valuations gradually recover, silver is entering a symmetrical phase where the chances of rising or falling are more balanced, meaning opportunities for gains come with risks.

Forecast 2: Significant long-term bull market potential
Analyst Peter Krauth is more optimistic, believing that despite short-term correction risks, during the upcoming market frenzy, silver prices could surge to the historical high of $300/oz. He emphasizes that supply deficits will drive silver into a long-term bull market supported by fundamentals—though reaching this target may take several years.

Forecast 3: Deep logic behind gold-silver ratio correction
Several analysts point out that a sharp correction in the gold-silver ratio will be key to silver’s future performance. Permanent supply gaps on the supply side lay the foundation for long-term appreciation of silver.

Key considerations for silver’s future trend

Although a short-term correction is underway, the fundamental logic remains unchanged. Silver’s long-term upward cycle is still supported by factors such as currency depreciation, liquidity tightening, and recovery in industrial demand. The key is whether investors can withstand short-term volatility and believe that the current technical retracement is merely a breather within the long-term trend.

For investors optimistic about silver’s long-term prospects, the current pullback may instead be an opportunity to reposition.