Silver is making a major rally amid tightening export controls in China and meme-stock-style buying by Main Street investors hoping to cash in on bear bets.
The precious metal is up 249% over the past year, including a 47% year-to-date jump, but not everyone believes silver prices are destined to keep rising.
Former JPMorgan strategist Marko Kolanovic and the famous Wall Street trader Peter Brandt both sounded silver alarms in separate posts on X (formerly Twitter) this week.
The stakes are high for investors as silver has gone parabolic, rising in a straight line, stirring animal spirits among those hoping for even bigger gains.
New buyers, however, should remember that precious metals are notorious for boom and bust movements, making new positions riskier now than they were months ago.
Some analysts are skeptical of silver’s recent rally.Shutterstock” loading=”eager” height=”540″ width=”960″ class=”yf-lglytj loader”/>
Some analysts are skeptical about silver’s recent rise.Shutterstock ·Shutterstock
On January 1, China designated silver as a strategic resource, along with rare earth minerals. The move restricts silver exports, requiring licenses that have become harder to obtain. Only 44 companies have qualified for silver export licenses as China tries to guarantee the supply of next-generation solar, electric vehicle and electronics technologies.
The move accelerated a rally that emerged last year, driven by optimism over industrial demand for high-tech applications and, more generally, growing interest among investors looking to diversify portfolios by holding silver ETFs such as iShares Silver Trust (SLV) or physical silver such as coins and bullion.
The numbers are truly massive. Silver’s move raised the market size above 6 trillion dollars. To put that figure into perspective, Nvidia, Apple, and Alphabet boast market capitalizations of $4.5 trillion, $3.75 trillion, and $4 trillion, respectively.
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Everyone wants in on the action.
On January 26, the iShares Silver Trust the exchange-traded fund had turnover of nearly $40 billion, according to Bloomberg, a figure similar to that of SPDR S&P 500 ETF (SPY), the underlying ETF for the 500 most influential publicly traded companies. Almost 20x higher than the average for most of last year.
Moves like this are not common and are often warning shots that investors should pay attention to. I’ve been following the markets for more than 30 years and have seen more than my fair share of stunning pops that eventually turned into drops.
I’m not alone in worrying that the recent move is causing a reversal.
Former JPMorgan strategist Marko Kolanovic, whose career spans more than 20 years and includes roles at Merrill Lynch and Bear Stearns before a 16-year stint at JPMorgan that helped him be included in Institutional Investors Hall of Famegave a clear silver forecast on X.
Kolanovic says the rally faces existential risks that will eventually lead to a bursting of the bubble.
“Unlike purely fictitious assets like NFTs, commodity bubbles cannot last long – industry demand dries up, supply (eg recycling) increases and new production is covered,” Kolanovic wrote.
Veteran trader Peter Brandt, Perhaps best known for being featured in “Unknown Market Wizards: The Best Traders You’ve Never Heard Of” by Jack Schwager, he also sounded the alarm.
Brandt began trading commodities as early as 1976 with ContiCommodity Services, a division of Continental Grain, where he handled institutional accounts for major consumer goods companies, including Campbell Soup.
He founded his trading firm, Factor Trading Co., in 1980, wrote “Trading Futures Commodity with Classical Chart Patterns” in 1990, and then “Diary of a Professional Commodity Trader” in 2011. Needless to say, he knows a little about commodities, including silver.
On X, Brandt offered a number of caveats, including one noting that recent silver trades reflect the action at the peak of the last silver boom in 2011.
“Today, nearly 2 years of global production traded on global exchanges. Over 1.5 billion ounces. The last time such a proportion was traded was April 25, the 2011 top day,” Brandt wrote.
Brandt previously correctly called for silver prices to fall on April 24, 2011.
Mania is hard to deal with right now because the ups and downs tend to go much further than most expect. Many silver bulls argue that the game changed in January, when China restricted exports and the US government added silver to its list of essential minerals.
I’ve learned over my decades in the markets that some of the most dangerous words in the English language when it comes to investing are “this time is different.”
Related: Silver wave masks quiet risk
Kolanovic and Brandt seem to agree. No one knows when silver’s rally will fade, but history can provide clues. For example, the Hunt Brothers tried to corner the silver market in 1980, driving prices from about $6 an ounce to nearly $50.
It ended very badly for the Hunt and those who followed them in silver. The silver market collapsed after COMEX implemented “Silver Rule 7”, limiting the buying of silver on margin, triggering massive margin calls and forced selling that wiped out 90% of silver’s value within two years.
In 2011, when Brandt was warning of risks to silver, prices were as close to $50 as a weak dollar led to increased buying. Again, exchanges implemented margin changes, hiking requirements until the bubble burst.
History does not repeat itself, as Twain opined, but it often rhymes. As Kolanovic pointed out, more supply, including holders of physical silver sales, changes in margin requirements or even silver miners selling future production, could derail Silver’s epic run.
Related: Robert Kiyosaki Teases Awesome New Gold Price Target
This story was originally published by TheStreet on January 27, 2026, where it first appeared in the Investing section. Add TheStreet as a favorite source by clicking here.
