3 warning signs silver could be headed for a deeper plunge, according to a top commodities expert

• Silver crashed on Friday, but it could be on the verge of a deeper plunge if the market flashes a handful of signals.
• CPM's Jeffrey Christian said he saw silver potentially dropping another 17% to $68 an ounce.
• He said he was watching for three signals in the market that would hint at a bigger drop to come.

Silver took a historic plunge on Friday, but there are signs traders should look out for that could suggest the pain isn't over.

That's according to Jeffrey Christian, a longtime commodities analyst and managing director at CPM Group.

The devil's metal — which has vaulted higher over the past year on a mix of economic factors and investor FOMO — just saw a brutal correction.

After rallying more than 200%, silver plunged more than 30% on Friday as the US dollar strengthened and investors reacted to Trump's pick to lead the Federal Reserve.

But the decline could keep going, Christian said, adding that he's on the lookout for a handful of signs to gauge whether silver was in for more pain.

Christian, for what it's worth, believes silver could remain elevated or rise through 2026, even after the big sell-off on Friday. That's because overarching concerns about inflation, the strength of the US dollar, and other risks that have driven more investors to pile into the precious metal as a safe-haven will still be a factor.

But, should silver's price retreat more, he believes traders could exit the market en masse. In the worst-case scenario, he sees the metal's price tanking to $68 an ounce, he told Business Insider, implying another 17% drop from the price late Friday afternoon.

"This is the way markets behave, and no one should be surprised that speculators have poured into a market that's moving parabolic, and no one should be surprised when they leave. It's happened over and over again," he said, adding that the Friday sell-off was a sign investors are already rushing to take profits.

Christian said his firm is keeping an eye on several indicators that could suggest that more froth will be taken out of the silver market.

Here's what they're looking out for.

1. When trading activity starts to stumble

Christian said he'd be looking for further signs that investors are losing interest in silver, which could slow down its momentum enough to cause more speculative traders to flee.

He pointed to measures of trading momentum in the price of silver itself, but also in bonds and holdings of ETFs related to silver.

The silver investing frenzy — which Christian suspects began in September, after the Fed signaled it would cut interest rates more aggressively than markets expected — didn't show many signs of letting up before Friday.

On Monday, retail traders snapped up a record net $171 million shares in the iShares Silver Trust ETF, according to data from VandaTrack Research. That outpaced flows in 2021, when retail investors orchestrated a short-squeeze of the metal, Ashwin Bhakre, the firm's head of product, wrote in a note this week.

Silver's Turnover Momentum — Vanda's gauge for how quickly investors are trading an investment — also spiked to 11.55 times its normal level at the start of the week, compared to Nvidia's Turnover Momentum of 7.54, Bhakre added.

"Silver has just become retail's new favourite toy," he wrote.

2. When new silver supply hits the market

Another thing that could further slow down silver's momentum is if inventories rise, Christian said.

The silver supply-demand imbalance was already narrowing in recent years. The world's supply of silver was estimated to grow 2% over 2025, while demand was estimated to pull back 1%, according to a joint report from The Silver Institute and Metals Focus.

In a presentation to clients this week, Christian said he saw several signs that silver supply was poised to increase. He pointed to record amounts of silver that could be mined from reserves, and signals like how many silver refineries are backlogged.

"You're already seeing refineries backed up with silver that investors have been selling," he told Business Insider.

3. If open interest falters

High open interest in silver futures is another factor that has supported the metal's price in recent months, Christian said.

Christian pointed in particular to active March 2026 silver contracts on the COMEX exchange. Open interest stands at around 500 million ounces of silver.

As those contracts approach delivery, some investors are expected to roll their contracts forward to a future month, keeping upward pressure on silver prices, Christian said. If open interest were to fall, that could remove a significant source of upward pressure on the price, he said.

"The spike may have peaked, but prices may hang up at high levels into March," he said of the outlook for silver during the sell-off on Friday.

Observers have been growing wary of silver amid its meme-like rally in recent months.

Marko Kolanovic, the former quant chief at JPMorgan, said he believed a 50% drop in silver prices was "almost guaranteed," citing past episodes of commodity speculation.

"Once you have the significant, substantial speculation, then of course there's risk that the move can go the other way," Jose Torres, a senior economist at Interactive Brokers, told Business Insider