Silver set for $100 peak before cooling off

February 06, 2026 (MLN): Silver prices could surge to around $100 per ounce by June 2026 before retreating toward $85 by year-end, which reflects a market caught between powerful investment momentum and mounting fundamental constraints.

Currently, spot silver is down 15.49% at $73.3475 an ounce as of [10:22 am] PST, according to data reported by Mettis Global.

A new research report by UBS Switzerland AG and UBS AG Singapore indicates, this outlook which suggests that while strong investor inflows and macro-hedging demand may fuel a near-term rally, elevated volatility and weakening industrial consumption could ultimately pull prices back as the year progresses, resulting in a pronounced mid-year peak followed by normalization.

The forecast comes in the wake of an extraordinary bout of market turbulence in which silver tumbled 26% in a single trading session, with intraday pullbacks from recent highs nearing 38% moves rarely seen in decades.

The report notes that this sharp repricing pushed historical volatility to extreme levels, with one-month volatility climbing above 110%, prompting CME Group to raise margin requirements for silver futures and emphasizing the increasingly fragile risk environment for leveraged participants.

The violent swings are partly attributed to the market’s starting point: silver had risen roughly 2.5x YoY before the correction, even as traditional bullish drivers such as exchange-traded fund inflows and speculative net-long futures positions were already beginning to fade.

Regional price dislocations also became evident, with Chinese silver trading at a notable premium to U.S. and London benchmarks, while positive swap rates suggested demand was becoming more narrowly concentrated rather than broad-based.

UBS further links the repricing to shifting macroeconomic narratives, including easing tail-risk concerns surrounding central bank independence following leadership changes at the Federal Reserve.

Its projections indicate that maintaining elevated silver prices would require investment demand to exceed 400 million ounces this year, against an estimated market deficit of nearly 300 million ounces.

The participation of Asian investors particularly in China is viewed as a key determinant of near-term price direction, as their response to recent volatility could either stabilize the market or accelerate further swings.

At the same time, UBS cautions that heightened uncertainty may trigger additional deleveraging among existing holders, leaving the market vulnerable to further bouts of forced selling.

Source: Bloomberg Finance, UBS Note: Forecasts refer to the end of the period.

Beyond investment flows, the report focuses structural challenges from the industrial side, which accounts for more than half of global silver demand.

Sustained high prices, the bank notes, are likely to encourage substitution, efficiency gains and delayed purchasing by manufacturers, gradually eroding consumption over time.

The combination of elevated option volatility, shifting positioning dynamics and sensitivity to macroeconomic developments is expected to keep price movements unusually wide through 2026, which  reinforces the bank’s view of a potential mid-year overshoot followed by year-end normalization.

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