Silver plunges into a bear market for the first time since 2022. Here's how long it may last.

By Myra P. Saefong

Gold isn't in a bear market, but the pullback in metals has been stunning

Silver futures entered a bear market on Jan. 30, but many strategists still see its underlying trends as bullish.

A more than 30% one-day drop in silver on Friday pulled prices for the metal into a bear market for the first time since 2022, but the move hasn't shaken everyone's confidence in the metal's potential.

"I'm inclined to discount the traditional percentage-drop parameters," said Peter Grant, vice president and senior metals strategist at Zaner Metals, adding that he isn't "entirely convinced silver is in a bear market" - even if it technically is.

Grant isn't alone. Other strategists pointed to silver's impressive climb, with prices that have more than doubled in the span of 12 months, as a sign that the precious and industrial metal won't be stuck in a bear market for too long.

Both gold (GC00) and silver (SI00) were so "overextended on the upside" that Grant was not yet ready to say the lows were in for prices. Consolidation in prices, however, would allow everyone to reassess the market, he said, adding that the underlying trends were still bullish for precious-metals prices, particularly when it comes to the "well-established de-dollarization trend."

'If central banks accelerate their buying on this dip, that will tell us a lot.' Peter Grant, Zaner Metals

"If central banks accelerate their buying on this dip, that will tell us a lot," Grant said.

Technically, however, silver is in a bear market - it dropped 31% Friday after President Donald Trump nominated Kevin Warsh as the next Federal Reserve chair, a move that appeared to ease some uncertainty around monetary policy and led to strength in the U.S. dollar.

Read: Gold now down nearly $1,000 from peak as silver extends its losses after a record 31% slump

Silver entered a bear market based on the definition of a drop of 20% or more from a recent high. The most-active futures contract entered a bear market on Jan. 30 after falling more than 30% from its record-high settlement of $115.504 an ounce on Comex, reached on Jan. 26, to settle at $78.631 on Friday, according to data from Dow Jones Market Data.

The move from a record high to a bear market took only four trading sessions. The last time that happened in such quick fashion was in 2011, when silver hit a high on April 29 and four trading sessions later, on May 5, 2011, settled into bear-market territory.

Despite silver having technically entered a bear market, John Caruso, senior market strategist at RJO Futures, remarked that it still doesn't sound right to say silver is in a "bear" market.

The white metal "just rose an obscene amount, percentagewise, over the past 12 months," he said. Silver is trading well over double where it was a year ago.

The gold and silver crash on Friday may have been a "vote of confidence for Kevin Warsh and Fed independence," Caruso said, but what the market may not have realized is that "money-printing powers seem to have shifted in recent years to Congress and away from the Fed."

"Congress is still running nearly 6% budget deficits with no signs of recession or war and really no endgame in sight," he said. That can be supportive for haven metals such as gold and silver.

For now, however, silver extended its price decline Monday, with silver for March delivery (SIH26) ending the day at $77.01, down 1.9%.

Silver's "charts do look pretty shaky," with the metal's major uptrend line having been broken, said Edward Meir, an analyst at Marex. The bottom for prices, however, is "yet to be defined."

It's too early to say what would mark a bottom for silver prices at this point, he told MarketWatch. It's possible that they could head down to the high $50s before a bottom is actually reached, he said, "but your guess is as good as anyone's."

Keep in mind that while silver prices lost roughly $30 an ounce on Friday, the "entire silver price" was at just $30 about 18 months ago, Meir said. "That gives you an idea of just how overvalued the commodity was."

As for where silver goes from here, Grant said, a rise back above $100 would ease pressure on the downside, but prices may not see new highs again in first half of this year.

Silver bulls have been "sufficiently rattled" by the latest move that they may just turn their attention to gold for the time being, he said.

Gold prices on Monday settled with a 2% loss at $4,652.60 an ounce, but they have not entered bear-market territory, despite Friday's more than 11% decline. They were down 13% from their record-high settlement of $5,354.80 on Jan. 29.

For now, the market has yet to reach "equilibrium," and margin-related selling as well as other features of the futures markets meant it would probably take all of Monday, and perhaps Tuesday, for things to settle down, Brien Lundin, editor of Gold Newsletter, wrote in a market note.

The CME raised its margin requirements for gold and silver as of the close of business Monday, likely contributing to Monday's weakness in the metals. Margin requirements are defined as the initial percentage of a contract value a trader deposits to hold a leveraged position in futures contracts.

'This correction has created some extraordinary, yet temporary, bargains.'Brien Lundin, Gold Newsletter

The fundamental factors of debt and depreciation - the "debasement trade" - remain firmly in place, Lundin said. "We absolutely needed to 'Warsh-out' the euphoria in metals and this will give us a firmer base going forward."

"The underlying trend for the metals remains upward," he said. "This correction has created some extraordinary, yet temporary, bargains."

-Myra P. Saefong

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02-02-26 1638ET