Lead: Silver suffered a sharp sell-off on Friday, and Jeffrey Christian, managing director at CPM Group, warns that the metal could still fall further if several market signals confirm a loss of momentum. Christian told Business Insider he is watching three specific indicators that, if they deteriorate, could drive silver down another 17% to about $68 an ounce. The move follows a parabolic run — gains of more than 200% over the prior year — and a more than 30% one-day drop as investors digested a stronger dollar and geopolitical and policy developments.
Key takeaways
- Silver plunged more than 30% on Friday after a rapid run-up earlier in the rally period; CPM Group warns of a possible additional 17% decline to $68/oz.
- CPM’s checklist focuses on three market signals: weakening trading momentum, rising physical supply/inventories, and falling open interest in futures.
- Retail flows were intense: iShares Silver Trust (SLV) saw a record net $171 million of buy activity on Monday, per VandaTrack Research data.
- VandaTrack’s Turnover Momentum for silver spiked to 11.55 times normal trading velocity, well above Nvidia’s 7.54 in the same gauge.
- Industry forecasts show silver supply could grow about 2% in 2025 while demand might decline roughly 1%, according to a joint Silver Institute–Metals Focus report.
- Open interest in active March 2026 COMEX silver contracts stands near 500 million ounces; a drop would remove a key source of price support.
- Analysts are divided: some see continued elevated levels through 2026 due to inflation concerns, while others warn of a deep correction if speculative positioning unwinds.
Background
Silver’s recent volatility is rooted in a mix of macroeconomic and market-structure forces. Over the prior year investors piled into precious metals on concerns about inflation, dollar moves, and geopolitical risk, producing a parabolic advance in silver that attracted both institutional and retail speculators. The metal’s ascent drew comparisons to earlier episodic fads — notably the 2021 short-squeeze episode — but the current wave has broader macro underpinnings tied to real yields and monetary-policy expectations.
At the same time, the market’s structure has changed: exchange-traded funds (ETFs) and futures markets now account for materially larger pools of investable metal and leverage. Mining output, refinery capacity and physical inventories are also part of the equation; industry estimates cited in recent research point to modest supply expansion into 2025 even as some demand categories cool. These supply-side signals matter because they determine whether raw physical availability can absorb investor buying or accelerate a reversal when speculative flows ebb.
Main event
On Friday, a rapid repricing occurred as a stronger US dollar and policy-related headlines prompted heavy selling in silver. Traders who had chased gains began locking in profits, and liquidity conditions in the market briefly deteriorated as turnover spiked and bid-ask spreads widened. Christian described the day as a classic example of speculative positioning unwinding when momentum reverses.
CPM Group’s framework for judging whether the sell-off will extend centers on three market developments. First, if trading activity and momentum measures begin to stall, the market could see a cascade of exiting speculators. Second, if mined production, refinery throughput and ETF-created inventories increase materially, the physical cushion that supported the rally may erode. Third, a sustained drop in open interest on COMEX futures — especially the roughly 500 million ounces in March 2026 contracts — would remove structural support from the futures complex and could accentuate price declines.
Christian nevertheless emphasizes that elevated macro risks — particularly inflation expectations and geopolitical uncertainty — could keep silver prices higher over a longer horizon even after a sharp correction. In his base case he is watching rather than predicting catastrophe; in his worst-case scenario the market capitulates toward the $68/oz level he cited to Business Insider.
Analysis & implications
If trading momentum measures roll over, the immediate implication is a shift in market psychology from fear of missing out to fear of being long. Speculative capital is often the most mobile, and when it exits quickly it can overwhelm natural physical buyers. That dynamic tends to compress liquidity and amplify intraday swings, a pattern observed in the recent one-day drop.
Rising available supply would change the supply-demand calculus. Industry forecasts indicating about 2% projected growth in supply for 2025 versus a 1% demand pullback are not dramatic on their own, but in an environment of speculative froth even marginal additions to available metal can act as a pressure-release valve. Increased refinery throughput or larger ETF-created inventories could thus accelerate price normalization or decline.
Open interest behavior matters because rolling and delivery mechanics create structural flows. With roughly 500 million ounces sitting in near-term COMEX contracts, orderly roll activity can sustain price levels; a marked fall in open interest implies investors are not rolling and are instead liquidating exposure. That would remove a persistent bid and increase downside sensitivity to macro news, potentially turning a correction into a deeper plunge.
For miners and physical-market participants, the implications are operational and financial. Sustained lower prices would pressure smaller producers’ margins and could slow capital spending, whereas prices that remain elevated—even after a correction—would support investment in exploration and processing capacity. Policy- and market-driven ambiguity over 2026 makes planning more difficult for industry stakeholders.
Comparison & data
| Metric | Recent value / change | Implication |
|---|---|---|
| Peak rally (year) | +200% (approx.) | Drew large speculative and retail interest |
| One-day drop (Friday) | -30%+ | Signaled rapid de-risking |
| CPM downside target | $68/oz (-17% from Friday close) | Worst-case speculative unwind |
| SLV inflow (Monday) | $171 million (net) | Record retail buying pressure |
| Turnover Momentum (Vanda) | 11.55x (silver) | Extraordinary trading velocity |
| Open interest (COMEX, Mar 2026) | ~500 million ounces | Structural futures positioning |
These figures illustrate how extreme trading behavior and concentrated futures positions can interact with underlying physical-market shifts to produce outsized volatility. Even small changes in any one item (flows, supply or open interest) can alter the balance between a contained correction and a deeper slump.
Reactions & quotes
CPM Group framed the sell-off as a typical speculative unwind and highlighted the three indicators it is monitoring.
“This is the way markets behave…no one should be surprised when they leave,”
Jeffrey Christian, CPM Group (managing director)
Market researchers flagged sharply elevated retail activity in ETFs and a surge in turnover, underscoring how much of the move was driven by short-term flows.
“Silver has just become retail’s new favourite toy,”
Ashwin Bhakre, VandaTrack Research (head of product)
Other market veterans stressed the risk that heavy speculative positioning can reverse violently.
“Once you have significant speculation, there is risk that the move can go the other way,”
Jose Torres, Interactive Brokers (senior economist)
Unconfirmed
- Whether the projected 2% rise in silver supply for 2025 will materialize fully — some mining projects face execution risk and permit delays.
- Whether a large portion of the roughly 500 million ounces in March 2026 COMEX contracts will be rolled forward or sent to physical delivery — intentions are not public for most holders.
- How sustained retail ETF buying will be after the recent volatility; continued flows would blunt downside, but a reversal could accelerate selling pressure.
Bottom line
Silver’s dramatic one-day drop exposed how quickly speculative momentum can reverse in a market that had attracted intense retail and institutional flows. CPM Group’s checklist — slowing trading momentum, rising physical supply/inventories, and falling open interest — provides a practical framework for gauging whether the correction is contained or the start of a deeper unwind toward the $68/oz scenario.
Investors and market participants should monitor detailed flow and positioning data closely: ETF flows, COMEX open interest by contract month, refinery throughput and official inventory reports will offer the clearest early warnings. Even if silver ultimately remains supported by macro risks into 2026, the path will likely be choppy; risk management and clarity on time horizon are essential for anyone exposed to the metal right now.