Silver Price Today, 29 January, 2026: Silver breaks $120 after a historic rally with a strong demand drives gains, but bubble warnings raise fears of volatility or a near-term correction.
Silver prices hit record highs amid supply shortages, geopolitical tension and growing debate over whether the rally has gone too far (Photo: File)
Silver Price Today, 29 January, 2026: Silver has shifted to the fringes of the commodities market to the very core of the market and the metal has reached a new all-time high of more than 1$20 per ounce on January 29, 2026, sparking a discussion in trading desks all over the world. Having skyrocketed nearly 300% in the last one year, investors are now wondering whether silver is getting into a new era of value or is heading toward a painful correction.
As soon as the price of silver reached the almost record level of $120.46 per ounce, it was heartening in the world markets. The rush is the culmination of a nonstop silver runup that has noted the asset rise 64% in 2026 making it one of the strongest-performing assets of the year to date. The futures market reflected the excitement with the trading volumes rising sharply to 81,000 contracts, by far exceeding the recent averages, indicating a strong level of speculative and hedging activity.
This rally is not only memorable due to its size, but also due to its speed with a 30 million ounce worldwide shortfall on supply has strained supply, which has increased prices faster than most analysts anticipated. The physical silver demand has gone through the roof and since late 2025, the increase in the physical silver demand in terms of 1kg silver bars has increased more than 500%. These numbers put this breakout of commodities amongst the most aggressive in the history of financial markets.
Silver becomes attractive due to its two-sided character and it is used as a store of value and as a vital industrial commodity. Solar manufacturing, artificial intelligence infrastructure and advanced electronics demand remain on a rise and strains supplies further. Meanwhile, investors who are unable to buy gold due to their limited wealth are moving away to silver, which is easier to obtain as an alternative, and this is compounding the effect of buying on momentum.
Silver has been following the historic run of gold to a high of 5600 an ounce and the increase in geopolitical tensions and especially between the U.S and Iran has rekindled safe-haven demand. This has been fueled by a weak U.S. dollar and anticipations of a reduction in the Federal Reserve rate which reduces the cost of holding the non yielding assets such as precious metals. The strength of gold, which is being boosted by central bank accumulation and by ETF inflows, is still in favor of silver indirectly.
Irrespective of good fundamentals, caution is increasing and the bank of America has declared silver as one of the highest heated assets in the world with prices being more or less 30% above long-run fundamental averages. The ratio of gold and silver is 45:1, the lowest ratio in 14 years, indicating that the silver might be racing faster than the sustainable value models and the final leg of the rally is not due to scarcity but rather to sentiment, analysts warn.
Silver tumbled more than 8% after a recent surge, as investors booked profits following record highs and falling gold prices, heavy speculative positioning and a smaller market amplified the decline. Additional selling in copper and nickel further pressured silver, triggering a swift market correction from overheated levels.
A crash is not necessarily imminent, but the chances are certainly higher than they were before as prices rise quickly, more retail investors get in and futures contracts accumulate, sharp corrections become inevitable. The recent volatility, such as intraday declines of 6%, illustrate just how quickly sentiment can turn sour once the momentum fades and once macroeconomic conditions stabilize or the dollar rises, silver can be repriced in a hurry.
Most analysts are now preferring a consolidation over a fall with a period of sideways action in the $105-$115 area would allow demand, supply and spec positioning to normalize. However, if geopolitical risks escalate and supply gaps persist, silver may still move towards $125-$130 levels before facing stiffer resistance and the next breakout would depend on whether $120 is strong support or merely a sign of the peak of over-exuberance. Spot silver lost 6.6% at $108.84 an ounce after reaching $121.64 and it has surged more than 50% so far this year, fuelled by supply deficits and momentum buying.
