Silver prices have been on a relentless surge, breaking above $120 per ounce for the first time on Thursday. However, a prominent market strategist believes this rally is nearing its end. Marko Kolanovic, the former Chief Strategist at JPMorgan, predicts a sharp decline is imminent for the precious metal, with its price potentially being cut in half. Kolanovic, who left JPMorgan in 2024, recently shared his perspective on the overheated silver market, stating that he views a significant price drop as almost inevitable. Substantial capital inflows into the precious metals market have driven both silver and gold prices to record highs. A combination of geopolitical concerns, central bank purchases, and a widespread "fear of missing out" (FOMO) among investors has fueled the upward trend since the beginning of 2025. But Kolanovic suggests that bulls should prepare for a reversal. He stated in a post on X on Monday, "It is almost certain that silver will decline by approximately 50% from current levels in about a year. Historical patterns for commodities or various speculative assets point to this outcome."
Kolanovic added that, despite his strong conviction for lower prices, he still considers shorting silver to be risky due to the high inter-market risks faced by short sellers. The strategist indicated that bubbles in commodity markets tend to burst more readily than those in narrative-driven, hot assets because real-world factors often create counter-adjustments that lead to price reversals. "Unlike purely fictional assets such as NFTs, bubbles in commodity markets do not last long—industry demand gradually diminishes, for instance, supply from recycling increases, while new production is discouraged," he further explained. Peter Brandt, a well-known futures and commodities trader, has recently expressed similar concerns about silver. In a post on X, he issued a stern warning to investors, reminding them of previous rallies that ended poorly. He pointed out, "The amount of silver traded on global exchanges currently is almost equivalent to two years of global production, exceeding 1.5 billion ounces. The last time such a large volume was seen was on April 25, 2011, the very day the market peaked."