Will the silver price continue to rise? Analysis after the extreme volatility

The question of whether silver prices will continue to rise in 2026 cannot be answered with a simple yes or no. In January 2026, silver reached a historic all-time high of $121.62 per ounce before crashing over 30% within about 30 hours — the worst daily decline since 1980. This extreme volatility shows: the silver market is in a phase of uncertainty, with significant upside potential as well as substantial downside risks. The answer depends on several interconnected factors that we will analyze below.

Silver Price in February 2026: Between Record and Crash

In early February 2026, silver traded around $84 per ounce — well below the January high but still far above previous years’ levels. This situation highlights the core problem of the current market: market participants are completely divided on the future direction.

On one side, there are compelling reasons for rising prices: global silver demand has exceeded supply for the sixth consecutive year. The cumulative supply deficit since 2021 amounts to nearly 820 million ounces. At the same time, mine production remains nearly unchanged at about 813 million ounces annually, since roughly 75% of silver is produced as a byproduct of other metals like gold, zinc, and copper, making it inflexible to higher prices.

On the other side, there is the expectation of a stronger US dollar under the new Federal Reserve leadership. Fed Chair Kevin Warsh is seen as a proponent of higher interest rates and opposed to expansive monetary policy — precisely this expectation caused the dramatic price drop at the end of January. A strong dollar makes silver more expensive for international buyers and thus suppresses global demand.

Why Silver Prices Are So Volatile in 2026

The unprecedented volatility of the silver market in 2026 can be attributed to a combination of several factors:

Geopolitical Uncertainty: US trade policies under Donald Trump constantly generate new market impulses. Sometimes they boost raw material demand as an inflation hedge, other times they weigh on economic growth.

Currency Dynamics: Movements of the US dollar currently dominate short-term price swings. Weak dollar phases support silver, while any announcement of tighter monetary policy triggers immediate selling.

Structural Market Forces: Simultaneously, physical demand from Asia — especially Hong Kong and South China — is growing, with silver bars sometimes sold out within hours. Buyers see silver as a cheaper alternative to historically expensive gold.

Regulatory Changes: As shown by the Dodd-Frank Act after 2011, regulatory changes can fundamentally alter market behavior.

Structural Supply Deficit as a Silver Price Driver

The core of the bullish silver thesis is the structural market deficit. The Silver Institute, the leading industry organization, reports that the silver market was in deficit for the fifth consecutive year in 2025. Experts also expect negative balances again in 2026.

This deficit is not cyclical but structural. Mine production cannot simply be increased because most silver deposits are produced as a byproduct of gold, zinc, and copper mining. Mining companies won’t open new zinc mines just because silver prices rise. Meanwhile, demand from new sectors continues to grow:

• Solar Energy: Silver is essential for high-efficiency solar panels
• Electric Vehicles: Every EV requires significantly more silver than conventional cars
• AI Infrastructure: Data centers and servers use large amounts of silver
• Medical Applications: Antibacterial properties drive demand

According to the Silver Institute, this trend is expected to intensify through 2030.

Expert Opinions: Will Silver Prices Rise or Fall?

Analysts are divided:

Bullish Scenarios:

• Citigroup forecasts silver at $150 within the next three months, calling silver “gold on steroids”
• Long-term optimists (Benzinga) expect average annual prices of $70 (2026), $102 (2027), $148 (2028), up to $307 (2030)
• Following the structural deficit thesis, new all-time highs are plausible

Bearish Scenarios:

• Marko Kolanovic, former JP Morgan chief strategist, estimates only $50 for 2026
• Goldman Sachs anticipates continued extreme volatility without a clear direction
• Investing Haven projects only $82 for 2030 — well below current levels
• A stable or rising dollar could negate bullish scenarios

The range from $50 to $150 shows the market is fully polarized.

Historical Lessons: What Silver Price Trends Teach Us

The history of silver offers important lessons:

The Hunt Scandal of 1980: Market Manipulation Fails

Brothers Nelson Bunker Hunt and William Herbert Hunt attempted to monopolize the global silver market in the late 1970s. They drove the price to $48.70 in January 1980 — a record high for the time. But the plan failed: regulation stopped the manipulation, and the brothers had to sell at huge losses. The lesson: even seemingly unstoppable monopolies can fail against regulation and market counterforces.

JPMorgan and the Dodd-Frank Act of 2011: Regulation Changes Markets

In 2010–2011, JPMorgan was accused of manipulating silver prices through massive futures positions. The subsequent regulation under the Dodd-Frank Act increased oversight significantly. While this temporarily heightened market volatility, it also increased transparency.

2025–2026: The Big Silver Rally

After decades of stagnation between $20 and $35, silver broke through its old all-time high of $49.95 in 2025, ending the year up 147%. January 2026 accelerated this move with another +70%, before Fed nominations reversed the trend. This rally was driven by:

• Inflation fears and currency devaluation expectations
• Strong physical demand from Asia
• Geopolitical tensions
• Structural supply shortages

Risks of Investing in Silver: What Investors Should Watch

Before investing in silver, consider these risks:

Interest Rate Risk: Silver pays no interest. In a rising interest rate environment, it becomes less attractive compared to fixed-income assets.

Currency Risk: The US dollar increasingly influences short-term prices. A strong dollar is a structural headwind.

Liquidity Risk with Physical Silver: Selling physical holdings can be time-consuming and costly.

Leverage Risk with Derivatives: CFDs and futures can lead to total capital loss if the market moves against you.

Bubble Risk: Bank of America warns of “bubble-like” dynamics in the current market. Rapid rallies are often unsustainable.

Investing in Silver in Uncertain Times: What Options Are There?

If you still want to invest in silver despite the risks, here are several options:

1. Physical Silver: Coins and bars provide direct ownership but require secure storage. American Silver Eagles and certified bars are tradable but involve spreads.

2. Silver Mining Stocks: Companies like Pan American Silver or First Majestic Silver offer leverage. However, operational issues can depress stock prices regardless of silver prices.

3. ETFs: iShares Silver Trust (SLV) or Sprott Physical Silver Trust (PSLV) offer simple, diversified exposure. Fees reduce returns.

4. Streaming Companies: Wheaton Precious Metals and Franco-Nevada provide operational risk exposure with lower mining costs.

5. CFDs and Futures: These offer leverage but are extremely risky for beginners. A single mistake can lead to total loss.

Your choice depends on your risk appetite, time horizon, and capital.

Conclusion: Will Silver Prices Rise?

The honest answer is: It depends.

Arguments for rising silver prices: Structural supply deficits, increasing demand from new technologies, physical scarcity, geopolitical uncertainties, and inflation fears create fundamental upside potential. Historical parallels like the Hunt scandal show that under certain conditions, commodity prices can move explosively.

Arguments against: A stronger US dollar, rising interest rates, regulatory interventions (like in 2011), and warnings of “bubble-like” dynamics from major banks suggest corrections are possible.

The best advice: Do not see silver as a pure gamble but as a portfolio diversifier and inflation hedge. The current volatility offers opportunities but also significant pitfalls. Consult a licensed financial advisor before building a larger position.

The risk-reward profile for 2026 in silver is much more volatile than in calmer periods — this should be factored into every decision.