11:43 pm - February 4, 2026
Silver prices may face years of continued weakness following last week’s dramatic crash, according to a new historical analysis. The precious metal, which plummeted as much as 36% on Friday, is showing signs of stabilization, but silver prices could remain under pressure for an extended period based on past market patterns. Research firm Ned Davis Research examined similar historical declines and found troubling precedents for current investors.
In a client note issued Monday, Ned Davis Research identified only four other instances over the past 58 years when silver dropped more than 20% from an all-time high. The firm’s commodity strategist, Matt Bauer, noted that each of these historical corrections resulted in further downside, with the metal trending lower for at least 12 months following the initial plunge.
Historical Silver Price Patterns Point to Extended Downturn
The research reveals sobering statistics for silver investors hoping for a quick recovery. According to Bauer’s analysis, silver prices took an average of seven years to find a bottom following major corrections. Additionally, the average peak-to-trough decline in these historical episodes measured approximately 65%.
The timeframe for recovery appears even more daunting when considering the full cycle. Following past corrections of this magnitude, silver took an average of 14 years to climb back to new all-time highs, according to the firm’s data. These extended recovery periods suggest investors may need considerable patience if history repeats itself.
1980 Crash Provides Cautionary Template
Bauer acknowledged that the historical averages are heavily influenced by silver’s catastrophic 1980 decline. During that episode, the metal fell 93% over 13 years following its peak, representing the most severe correction in the data set. However, he believes the current market situation shares the most similarities with that historic 1980 drop.
Meanwhile, the catalyst for last week’s plunge appears to have been the unwinding of speculative positions that had fueled silver’s remarkable rally. Traders rapidly exited bets that had propelled the precious metal to record territory over the previous year. The speed and magnitude of the decline caught many market participants off guard.
Silver Price Speculation Drove Recent Rally
The precious metal had attracted intense speculation from investors throughout the past year as it became one of the market’s top-performing assets. Silver prices more than doubled during 2025 alone, transforming the metal into a favorite among traders seeking outsized returns. Despite last week’s sharp correction, silver remains up 24% year-to-date, according to market data.
In contrast to hopes for a rapid rebound, the Ned Davis Research analysis suggests that current silver prices may still have substantial room to fall. If the metal follows the general pattern established by past cycles, significant downside could lie ahead before a true bottom emerges. The firm’s historical framework indicates that the pain may be nowhere near over for silver holders.
Market Context and Implications
The recent volatility in silver prices comes amid broader uncertainty in precious metals markets. Additionally, the sharp correction has raised questions about whether speculative excess had driven prices to unsustainable levels before the crash. Investors who purchased near recent highs now face the prospect of extended losses based on historical precedents.
However, not all analysts may share the same bearish outlook, and market conditions can differ significantly across historical periods. The current macroeconomic environment, including factors such as industrial demand for silver and monetary policy, could influence the metal’s trajectory in ways that diverge from past patterns.
Market observers will be watching whether silver prices continue to stabilize at current levels or resume their decline in the coming months. The timeline for any potential recovery remains highly uncertain, with historical data suggesting a protracted period of weakness may lie ahead for the precious metal.
