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After severe fluctuations early this year, the silver market now stands at a new starting point. Nitesh Shah, Head of Commodities and Macroeconomic Research at WisdomTree, pointed out that the sharp pullback from January’s record highs does not signal the end of the bull market, but rather clears the way for a more sustainable upside.
In January 2026, silver briefly touched an all-time intraday high of $120 per ounce amid a speculative frenzy, only to suffer a brutal correction. As of press time on July 22, spot silver was trading at $59.72 per ounce, up nearly 2% on the day, but down approximately 18% year-to-date. However, over a 12-month horizon, silver still retains a gain of about 60%.
“The painful correction is actually a relief for industrial consumers,” Shah said. “If silver prices had remained persistently high at $120, industrial demand destruction would have accelerated significantly. Even at current levels around $60, manufacturers are already facing input costs 60% higher than a year ago, particularly in the solar photovoltaic sector, where silver accounts for a meaningful share of production costs.” The Silver Institute previously projected that, due to thrifting and substitution, global industrial silver fabrication would decline by 2% to 650 million ounces in 2026, marking a four-year low.
Geopolitical factors are providing fresh support for precious metals. The U.S.-Iran conflict continues to escalate, with U.S. forces launching airstrikes against Iran for the 11th consecutive night, Iran attacking U.S. military assets in the Middle East, and its ally the Houthis imposing a maritime embargo on Saudi Arabia. The Strait of Hormuz and the Bab el-Mandeb strait now face the risk of simultaneous disruption, with Brent crude briefly breaking above $95 per barrel. Gold rebounded accordingly, with spot gold returning above $4,100 per ounce on July 22, rising more than 1.5% intraday.
WisdomTree expects gold prices to rise above $4,560 per ounce over the next 12 months, which would serve as a core catalyst for silver’s recovery. Shah predicts that silver will rebound to $70 per ounce by the second quarter of 2027, but he emphasizes that this will be fundamentally different from January’s speculative spike — the next advance is expected to be driven by fundamentals, not momentum trading.
The report also highlights multiple headwinds: softer Chinese solar demand due to the front-loading of the 2025 installation rush, gradually easing inventory tightness in the U.S., modest growth in mine supply, and policy headwinds from India’s tariff hike on silver imports from 6% to 15%. In addition, silver’s smaller market size and higher retail participation make it inherently more susceptible to speculative sentiment.
“Our forecast is not aimed at capturing a short-lived price spike, but rather at a more sustainable price trajectory supported by macro, industrial and supply-side fundamentals,” Shah concluded. For investors, after the violent swings, the repricing of the silver market may have only just begun.
