Silver prices may face years of downside following last week’s dramatic selloff, according to historical analysis from Ned Davis Research. The precious metal plunged as much as 36% on Friday as traders unwound speculative positions, marking one of the most severe corrections in silver’s recent history. Despite showing signs of stabilization in recent sessions, silver prices could take years to recover based on past patterns of similar declines.
The research firm examined instances over the past 58 years when silver dropped more than 20% from an all-time high. According to Matt Bauer, a commodity strategist at Ned Davis Research, there have been only four other such occurrences during this period. In every case, these corrections led to extended periods of additional losses.
Historical Patterns Suggest Extended Silver Price Decline
The analysis reveals troubling trends for investors hoping for a quick recovery. In all four previous instances of major corrections, silver prices continued trending lower for at least 12 months following the initial drop. The average time to reach a bottom was approximately seven years, with peak-to-trough declines averaging 65%.
Additionally, the metal took an average of 14 years to climb back to new all-time highs after such corrections. These statistics are heavily influenced by silver’s historic 1980 crash, when prices plummeted 93% over 13 years following their peak. However, Bauer noted that last week’s decline shows the most similarities to that 1980 drop among all historical corrections.
Speculative Trading Fueled Recent Rally
The recent volatility in silver markets reflects the unwinding of significant speculative positions that drove prices higher over the past year. Silver emerged as one of the market’s best-performing investments in 2025, with prices more than doubling before last week’s correction. Even after the dramatic selloff, the metal remains up 24% year-to-date.
Meanwhile, the rapid appreciation attracted increased speculation from retail and institutional investors alike. This influx of speculative capital helped propel silver to record highs but also created conditions for a sharp reversal when traders began exiting positions. The speed and magnitude of Friday’s decline underscored the market’s vulnerability to rapid sentiment shifts.
Comparison to 1980 Silver Crash Raises Concerns
The parallels between the current situation and the 1980 silver crash are particularly concerning for bulls. That historic episode saw prices collapse from their peak and remain depressed for over a decade. The 1980 crash followed a period of intense speculation and manipulation, culminating in a dramatic unwind that left long-term investors nursing substantial losses.
In contrast to more modest corrections, the 1980 decline reshaped silver markets for a generation. If the current episode follows a similar trajectory, as Bauer suggests is possible, silver investors may face an extended period of disappointing returns. The research indicates that patience will be required for those hoping to see new record highs in silver prices.
Secondary Keywords Influence Silver Price Outlook
Market analysts continue to monitor precious metals markets for signs of stabilization or further weakness. The correction in silver has also affected related assets, including gold and other commodities that saw strong gains alongside silver during the recent rally. However, the severity of silver’s decline has been notably greater than movements in other precious metals.
The broader implications for commodity markets remain uncertain as investors reassess positioning across various asset classes. Some analysts view the selloff as a healthy correction that could create buying opportunities, while others see it as evidence of an overheated speculative bubble finally bursting. The coming months will likely provide more clarity on which interpretation proves correct.
Market participants will be watching for signs of where silver prices ultimately find support and whether the metal can establish a sustainable base for future recovery. The timeframe for any meaningful rebound remains highly uncertain, with historical precedent suggesting a potentially lengthy process ahead for silver bulls.
