Author：Currency Explorer

The recent dizzying plunge in silver prices and the erratic trading this week have left investors wondering: where exactly is the bottom for silver, and when will it appear?

The price of this white metal hit a record high this year, but plummeted nearly 30% last Friday. Since then, silver has struggled to hold its ground, and although it rebounded on Tuesday and Wednesday, it plunged again by 19% on Thursday.

UBS strategists noted that the recent plunge appears to be driven more by widespread risk aversion than by a fundamental collapse, but they warned that extreme volatility exposes short-term positions to significant risk. The bank stated in a report released Thursday evening:Since the one-month volatility of silver has now exceeded 100%, there may be sharp price fluctuations in the short term.UBS added that without sustained investment demand, silver may struggle to maintain levels above $85 per ounce.

According to data from the London Stock Exchange (LSEG), silver has recorded 11 instances of sharp price fluctuations of 5% or more since the beginning of the year. UBS strategists stated:Taking these factors into account, as well as the current extreme volatility, we believe that long-term exposure to silver at current levels is not attractive.”

However, UBS believes the long-term fundamentals remain intact. The bank argues that declining nominal and real interest rates, global debt issues, a depreciating dollar, and expectations of a global economic recovery in 2026 will all drive prices higher. The bank continues to project a supply gap of nearly 300 million ounces this year, with investment demand expected to exceed 400 million ounces, but also warns that…High prices may dampen demand for industrial applications.

The sharp rise in option prices has created opportunities for investors to profit by establishing a price floor (rather than betting on further increases). With monthly volatility approaching 80%, UBS stated that strategies benefiting from silver holding above $65 per ounce are more attractive in the short term. This actually reflects the view that:While prices may remain volatile, they are unlikely to fall below this level in the near term.

Nicky Shiels, head of research at MKS PAMP, said that silver's recent performance bears little resemblance to previous bull markets driven by physical supply constraints. "Given silver's extraordinary volatility, it truly deserves the label of a 'meme commodity'," Shiels stated. She added that while silver isn't cheap in absolute terms, the expansion of retail channels has amplified speculative flows.She expects silver to digest the excess pressure from its previous rise in the coming weeks, rather than rebound immediately, and prices may even fall to $60 per ounce.

Vasu Menon of OCBC Bank believes that while short-term sentiment has been severely impacted, the structurally bullish logic for silver remains for investors who can tolerate volatility. As Managing Director of Investment Strategy, Menon stated that silver's dual nature often makes it vulnerable to intense risk aversion. Menon said, "Silver can be viewed as a hybrid asset, possessing characteristics of precious metals, industrial metals, and speculative elements."When there is a large influx of retail investor funds, it may appear to be a meme asset.However, it should still be remembered that it has fundamental drivers.

Menon has set a long-term price target of $134 per ounce for silver by March 2027.Currently, this white metal is widely used in a range of industrial and technological fields, including solar energy, catalysts, and electronic products.