While India's silver imports have plummeted, the sharp pullback in the international silver price from its January highs has prompted a reassessment of the market's direction. Although the recent decline has disappointed some investors, Nitesh Shah, Head of Commodities and Macroeconomic Research at WisdomTree Investments, views the price drop as a necessary process for building a more sustainable bull market for silver.
Analyst Maintains Bullish Long-Term Outlook
In a recent outlook report, Shah forecasts that the silver price will recover to around $70 per ounce by the second quarter of 2027. He believes the primary driver will be strength in the price of gold. However, unlike the speculative frenzy that briefly pushed silver above $120 per ounce earlier this year, the next rally is expected to be driven by improving fundamentals rather than momentum trading.
Shah wrote, "The silver surge of January 2026 is clearly in the past. Therefore, we expect the price to rise to $70 per ounce, but we view this as a fundamentally supported uptrend, not a repeat of the speculative spike seen in January."
Key Support Level Holds Despite Volatility
Despite the ongoing high volatility, silver has managed to hold above the key support level of $50 per ounce. In an interview with Kitco News last month, Shah also stated that the multi-month correction should not be interpreted as a deterioration in the long-term outlook for precious metals. He noted that silver historically follows gold's movements, but with greater magnitude.
He said, "Silver just follows gold, right? And it has a high beta. That applies on the way up, and it will apply on the way down as well."
Correction Seen as Healthy for Industrial Demand
Shah argues that while this adjustment has put pressure on investors, the lower prices are more acceptable for industrial consumers, whose costs had risen significantly during January's price spike. WisdomTree Investments warned in its report that silver prices above $120 per ounce would accelerate a contraction in industrial demand. Even at the current price of around $60 per ounce, manufacturers might look to reduce their silver usage where possible.
In the Kitco News interview, Shah further pointed out that even after the price retreat from its highs, manufacturers are still facing substantially elevated input costs. He said, "If you look at prices a year ago, we are still up 60% from that level. Manufacturers have to deal with a 60% cost increase, which is not easy to absorb."
In his view, allowing the price to return to a more sustainable range ultimately helps preserve one of silver's most important long-term supports: its growing industrial demand. For this reason, he sees the current correction as a market recalibration rather than a breakdown of the upward trend.
Macroeconomic Factors Remain Supportive
Simultaneously, Shah remains optimistic about the investment outlook, as the macroeconomic factors supporting gold are also expected to bolster silver. WisdomTree Investments expects the gold price to rise above $4,560 per ounce over the next 12 months, which is seen as a primary catalyst for silver's subsequent recovery.
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