Silver prices are experiencing violent swings! After a period of frenzied gains, silver prices have shown significant volatility over the last two trading sessions. During Thursday's (January 15th) session, spot silver briefly hit a historic high of $93.71 per ounce, only to subsequently plunge sharply, with intraday losses exceeding 7% at one point; by the close, losses had narrowed to 0.65%. On Friday (January 16th), spot silver once again saw a sell-off, with intraday losses surpassing 6% before closing down 2.43%, barely holding above the key $90 per ounce level.
Regarding the outlook for silver, JPMorgan Chase stated that silver faces multiple risks, including suppressed industrial demand due to high prices and continuous outflows from ETFs. The bank indicated that the silver market carries substantial risk of a correction, while remaining bullish on gold. However, some other institutions believe that gold and silver prices have historically shown a high degree of correlation. Persistent safe-haven sentiment and ongoing tightness in silver market supply are unlikely to change, meaning the fundamental logic supporting higher silver prices remains intact.
Silver prices plunged mid-session on January 15th, dropping as much as 7.3% before reclaiming most of those losses. This followed a staggering surge of over 20% in the preceding four trading sessions. On January 16th, silver prices again experienced extreme volatility, with spot silver falling over 6% intraday before closing just above $90 per ounce.
Bloomberg reported that US President Trump decided not to impose broad tariffs on key mineral imports, including silver and platinum, stating he would instead seek bilateral negotiations and proposed the idea of setting price floors. This decision followed a months-long review aimed at assessing whether foreign imports threaten US national security. Previously, market fears of imminent tariffs had caused some supply, including silver, to be held in US warehouses, sparking a global short squeeze last year that continued to support prices into 2026.
Daniel Ghali, Senior Commodity Strategist at TD Securities, noted in a report that Trump's decision "signals a more targeted approach by the US administration in future decisions." He said this "significantly alleviates concerns about broad US actions impacting the physical metal that underpins benchmark prices." Currently, warehouses linked to New York Mercantile Exchange futures contracts hold approximately 434 million ounces of silver, an increase of about 100 million ounces from a year ago when tariff-related trade disruptions intensified.
Rona O'Connell, an analyst at StoneX Group, suggested that while these inventories might help ease tightness in other markets, "getting silver out of the US might still face some blockages." She pointed out that silver remains on the list of critical minerals potentially targeted by future trade measures.
Silver outperformed gold last year, rallying nearly 150%, as some investors turned to silver after gold became too expensive. Silver also benefited from robust industrial demand, particularly from the solar industry, with a speculative buying frenzy in recent weeks further fueling its ascent. Christopher Wong, a strategist at OCBC Bank, stated that silver's medium-term outlook remains decidedly positive, supported by supply deficits, industrial consumption, and spillover demand from gold. However, the rapid pace of recent gains suggests caution is warranted in the short term.
The latest Bloomberg Markets Live Pulse survey indicates that gold's rally could persist beyond January. Although silver and copper have reached similar milestones, there are signs that inflows into these metals are wavering as investors weigh the durability of supply constraints.
JPMorgan: High Risk of Correction According to information from the Wind Trading Desk, JPMorgan Chase released a report stating that the latest US Section 232 executive order has temporarily not imposed additional tariffs on precious metals, providing short-term relief for silver. However, it still faces multiple risks: industrial demand is being suppressed by high prices, ETF funds continue to flow out, and although inventories have declined, they remain at elevated levels. In contrast, gold benefits from ongoing central bank purchases, hedging against geopolitical risks, and expectations for policy easing, leaving room for further upside.
The report stated that industrial demand is facing increasing pressure. JPMorgan warned as early as last December that rising silver prices could threaten 50 to 60 million ounces of demand from the solar industry over the coming years. As silver prices continue to climb, cost pressures have become more pronounced. Currently, raw material costs for silver account for about 30% of the total selling price of solar panels, and even with price increases for end-products, it is difficult to fully pass on the rapid cost increases.
Industry countermeasures are emerging, with several leading photovoltaic companies announcing they will accelerate the adoption of technical substitution solutions like "copper for silver"; related capacity conversions are expected to be implemented gradually starting in the second quarter. Furthermore, the structure of investment demand is also changing significantly. Although global silver ETF holdings increased by 278 million ounces in 2025, a 27% year-on-year increase, the market has shown a clear divergence between price and volume since late last year: silver prices rose nearly 25% after the holiday period, while major silver ETFs saw a net outflow of approximately 18 million ounces during the same period. This contrasts sharply with the "rising price and volume" pattern seen in the second half of last year. Additionally, net long positions managed by funds on COMEX have been shrinking continuously since mid-December, reflecting a shift towards caution among institutional investors.
Nevertheless, several other institutions remain optimistic about silver's long-term trajectory. CITIC Futures noted that the previous rally in silver was driven by a confluence of tariff expectations, tight physical supply, and strong investor sentiment, with the pace of gains significantly outpacing the ability of fundamentals to digest them. As tariff expectations cooled, profit-taking combined with a high-volatility environment triggered a rapid price pullback. From a medium-term perspective, supply constraints, industrial demand (from solar, etc.), and spillover effects from gold remain supportive, but the market needs time or a price correction to digest the excessively crowded trading structure. In the short term, focus on the decline in silver volatility and the repair of positioning structures, while being wary of technically amplified fluctuations during high-level consolidation; the medium-term trend will still be dominated by fundamentals and macro logic, and a correction could provide a better entry point for long-term capital reallocation.
China Galaxy Securities expects that silver prices may face short-term trading risks next week, with potential for a correction due to profit-taking, but further gains towards $100 per ounce cannot be ruled out. From the perspective of its precious metal attributes, gold and silver prices have long shown high correlation. From an industrial perspective, demand for silver from sectors like photovoltaics and new energy provides solid medium- to long-term support for prices. Persistent safe-haven sentiment and ongoing tightness in silver market supply are unlikely to change, meaning the fundamental logic for rising silver prices remains robust.
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