Silver Price Forecast: Why the Pullback From $120 Could Fuel the Next Rally

Author: Muhammad Umair

Published: February 8, 2026

Overview

The article discusses the recent volatility in silver prices, which saw a significant drop from $120 to $64. This correction is viewed as a healthy reset rather than a reversal, with various macroeconomic factors and technical indicators suggesting a bullish continuation for silver.

Macro Forces Driving the Silver Surge

Safe-Haven Demand Rises

As global risk sentiment shifts due to geopolitical tensions and US diplomatic frictions, investors are moving towards safe-haven assets. Silver is gaining traction as an alternative hedge alongside gold, particularly as Bitcoin's price falls below $70,000.

COMEX Delivery Pressure

There is an increasing threat of a physical delivery crunch at COMEX, with registered reserves dropping to 103 million ounces against an open interest of 429 million. This imbalance could lead to significant price movements as demand outstrips supply.

Economic Conditions

Despite loose financial conditions, there are signs of economic deceleration, particularly in heavy truck sales. This combination of easy monetary policy and tight supply, along with rising demand for safe-haven assets, supports the case for higher silver prices.

Technical Outlook

The article notes that the recent drop in silver prices was expected due to overbought conditions, as indicated by the RSI (Relative Strength Index). The price correction to $64 is seen as a healthy adjustment, with strong support expected between $50 and $60, which could lead to another rally later in 2026.

Key Intermarket Trends

Silver-to-CPI Ratio

The silver-to-CPI ratio has broken a 40-year downtrend, indicating a significant shift in silver's real value relative to inflation. This breakout suggests potential for multi-year rallies in silver prices.

Silver-to-Gold Ratio

The silver-to-gold ratio shows a recovery from long-term support, indicating continued strength in silver. A break above 0.02 in this ratio could signal strong leadership in the silver market.

Conclusion

The article concludes that the recent correction in silver prices is a necessary reset that sets the stage for future rallies. With macroeconomic conditions favoring higher prices and significant technical indicators supporting this view, silver is positioned for potential upward momentum in the latter part of 2026.