Silver prices correct sharply from record highs; brokerages see wide trading range next year

Résumé détaillé

Global banks expect silver to trade in a broad range next year, with forecasts ranging from the low $60s to as high as $95 an ounce. While some see a recovery, none expects silver to return to triple-digit prices in the near term.

Silver prices have experienced extreme volatility and sharp corrections this year, falling to less than half of their all-time highs. The steep drop has been driven by a stronger US dollar, higher bond yields, and a 19% decline in demand from the solar panel industry.

Despite the decline, major global brokerages and banks expect the precious metal to trade in a broad range next year, though none anticipate a return to triple-digit prices.

In the international market, silver has been unable to successfully cross above $50 an ounce recently. Prices stood at $30 an ounce on January 1, 2025, and started the year trading at $71 an ounce.

The metal surged to an all-time high above $120 an ounce in January but failed to hold onto the triple-digit levels. By June, prices were at $57, and by October, they had fallen to $54. Currently, silver is trading around $50 to $51, having hit a low of $48 an ounce after its peak of $122.

Indian markets mirrored this extreme volatility. Silver prices stood at ₹1,00,000 per kg on January 1, 2025, and started the year at ₹2,00,000 per kg before making history at an all-time high of ₹4,29,000 per kg.

However, sharp declines began in May, and by June, prices broke below ₹2,00,000 per kg, hitting ₹1,94,000. In November, silver has traded in a range of ₹1,77,000 to ₹1,82,000 per kg, which is less than half of the record high hit earlier in the year.

The constant decline in silver prices has been attributed to a higher interest rate trajectory, elevated bond yields, and strength in the US dollar index, which continue to weigh on dollar-denominated, low-yielding precious metals. Additionally, a recent sell-off in artificial intelligence (AI) and technology equities has impacted silver, which is widely used in these sectors.

The unwinding of speculative long positions, margin calls, and margin hikes have also caused damage. Furthermore, improvements in solar panel technologies have led to a 19% decline in silver demand from that industry.

Looking ahead…

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