Silver didn't just rally—it went parabolic. Now Marko Kolanovic is calling the comedown. The former JPMorgan chief strategist said silver is "almost guaranteed to drop ~50% from these levels within a year or so."
That doesn’t sound like a cautious forecast. It sounds like a near-certainty. In a market where silver ETFs like iShares Silver ETF (NYSE:SLV), abrdn Physical Silver Shares ETF (NYSE:SIVR) and Sprott Physical Silver ETF (NYSE:PSLV) have become momentum trades for macro tourists, that's a contrarian grenade.
The Bubble Math
Kolanovic's logic is blunt: speculative manias rarely end gently. Commodities blow off, positioning unwinds, and prices mean-revert hard.
Silver's surge—driven by retail momentum, tight supply, and macro fear—checks all the boxes.
Contrarian trader Kevin Muir recently said silver may have already peaked, pointing to exhaustion signs as gold kept rallying while silver stalled.
Silver is not gold. It's gold with beta—and beta cuts both ways.
The 1970s Trap
In the 1970s, gold surged from roughly $40 to $200, sucked in euphoric buyers, then crashed back near $100. Many top buyers capitulated—only to miss the historic rally to $800 later in the decade.
Mean reversion shook out weak hands. The secular trend wasn't over.
Who knows, silver may be setting up the same psychological trap.
The Bull Case Isn't Dead
Silver bulls, however, argue that this time is different. Structural deficits, solar demand, AI hardware, and electrification are soaking up supply. By that logic, SLV and PSLV aren't just trades—they're long-term energy-transition proxies.
Silver, in this view, isn't a bubble. It could be the industrial metal of the decade.
The Tension Trade
Silver now sits between two regimes: macro fear hedge and industrial scarcity asset. Bears see a mania chart. Bulls see a secular shortage.
Kolanovic's warning is that silver behaves less like a store of value and more like a leveraged macro instrument. When positioning unwinds, it unwinds violently.
A 50% drop wouldn't be unprecedented. It would be historically normal.
The bigger question: would that be the end—or the 1970s-style shakeout before the next leg higher?
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