Silver's correction has reset the market, clearing the way for a sustainable rally to $70 – WisdomTree's Nitesh Shah
Silver's brutal correction from January's record highs has disappointed investors, but one precious metals strategist says lower prices are exactly what the market needs to build a more sustainable bull market.
In his latest outlook, Nitesh Shah, Head of Commodities and Macroeconomic Research at WisdomTree, said silver should recover toward $70 an ounce by the second quarter of 2027, supported primarily by stronger gold prices. But unlike the speculative frenzy that briefly pushed silver above $120 an ounce earlier this year, the next advance is expected to be driven by improving fundamentals rather than momentum trading.
"Silver's exuberance in January 2026 is now clearly in the rear-view mirror," Shah wrote. "We therefore see silver rising towards US$70/oz, but view this as a fundamentally supported move rather than a repeat of January's speculative spike."
Despite persistent volatility, silver has managed to hold critical support above $50 an ounce. Spot silver last traded at $59.72 an ounce, up nearly 2% on the day.
In an interview with Kitco News last month, Shah said investors should not interpret silver’s months-long correction as evidence that the precious metals long-term outlook has deteriorated. Instead, he argued the metal is simply following gold—as it always has.
"Silver just moves with gold, right? With a high beta,” he said. “It was true on the way up, it's got to be true on the way down."
Although painful for investors, Shah said lower prices are welcome for industrial consumers that struggled with January's rally.
WisdomTree's report warns that silver prices above $120 an ounce would have accelerated industrial demand destruction, while even prices around $60 an ounce are likely to encourage manufacturers to reduce silver usage where possible. Softer Chinese solar demand, easing inventory tightness and a gradual increase in mine supply should also help cool the market after January's speculative surge.
During the interview, Shah also expanded on that theme, noting that manufacturers have been forced to absorb a dramatic increase in input costs despite the recent correction.
"Silver's down, what, 18% year-to-date? That sounds huge, but if you look at where silver was one year ago, we're 60% up from that," he said. "Manufacturers have to face a 60% higher cost. That's not easy to bear."
He added that the pressure is particularly acute in the solar sector, where silver represents a meaningful share of production costs.
"When you're a solar panel manufacturer, for example, silver's a large part of your cost base. You'd look to other technologies," he said.
Shah said bringing prices back to more sustainable levels ultimately protects one of silver's biggest long-term advantages—its growing industrial demand.
At the same time, he remains constructive on the investment outlook because silver should continue benefiting from the same macroeconomic forces supporting gold. WisdomTree expects gold to climb above $4,560 an ounce within the next 12 months, providing the primary catalyst for silver's recovery.
Unlike gold, however, silver's smaller market and larger retail investor base make it inherently more volatile.
"Silver is a smaller market than gold and has a significant degree of retail participation," Shah wrote. "As a result, it is more prone to speculative episodes.”
