(Kitco News) - Silver prices could remain under pressure for years as the precious metal struggles to recover from its historic rally, and one market strategist warns that prices could fall back to $50 an ounce in the near term before finding meaningful support.
In a recent note, Mike McGlone, senior commodity strategist at Bloomberg Intelligence, said that silver faces a difficult technical outlook, with prices potentially remaining trapped between $50 and $84 an ounce for years.
The bearish outlook comes as spot silver currently trades at $59.11 an ounce, down nearly 2% on the day.
McGlone has been cautious on silver ever since prices hit an all-time high above $120 an ounce at the start of the year. He has warned investors that the unprecedented rally could represent a lasting multiyear high-water mark for the precious metal and that prices might need to consolidate at lower levels to stabilize demand.
“The last time silver's price and volatility stretched as much as in 2026 was during the 1979-80 surge that led to a high near $50 an ounce -- a level not extended until last year,” he said. “Our bias is that silver's hangover may be as enduring as in past extremes, and around $50 is the first good support.”
McGlone noted that silver's recent volatility underscores just how extreme the market has become. According to his research, the precious metal's 260-day volatility is currently 5.1 times that of the S&P 500, its highest relative level since 1980, when silver experienced a historic price collapse.
He added that there is a risk of prices moving even lower, noting that silver's 10-year mean-reversion price is around $31 an ounce.
Looking at previous rallies in 1980 and 2011, McGlone explained that prices did not bottom out until they dropped to $3.60 in 1993 and $11.60 in 2020, respectively.
“What connects 2026 to previous enduring highs is silver's roughly 2.7x premium to its 10-year mean at the end of 2025 -- the greatest since 1979,” he said.
McGlone also warned investors that silver faces a significant hurdle before sentiment can improve. He said that prices would have to climb back above $84 an ounce and hold that level to regain their lost luster.
McGlone is not just bearish on silver; he also expects lower gold prices. He anticipates that gold prices will eventually fall below support at $4,000 an ounce.
“Gold faces headwinds into year-end from the highest US Treasury five-year yields in two decades, partly due to oil's 2026 bounce,” he said.
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