Senior strategist warns: Silver may experience severe divergence next year, with prices potentially reaching $75 and dipping to $40.

Senior strategist Mike McGlone said on Wednesday that the astonishing doubling of silver prices this year is "somewhat unsettling." He pointed out that due to silver's high volatility, its price could surge to $75 per ounce or fall back to $40 per ounce. McGlone noted that silver has historically been prone to extreme price increases - the current price is already 83% higher than its five-year average. However, historically, these price increases have often ended poorly. He cited examples such as the peak of around $49.50 per ounce in 1980 not being surpassed until 2011, and the low of around $3.60 per ounce in 1993 leading to a drop of about 93% from the peak. Similar situations occurred in 1974, when silver closed at around $4.47 per ounce, a level not surpassed until 1977, indicating a relatively gentle adjustment over time. He added that the most recent sustained increase was in 2010 when silver closed near $31 per ounce, the high in 2011 was $49.80, and the low in 2020 was $11.64. McGlone warned that the annual market volatility for silver is around 30%, meaning that if prices were to fluctuate by one standard deviation next year, it could push silver to a high of $75 per ounce or a low of $40 per ounce. On Wednesday, silver prices continued to decline for the second consecutive trading day, while gold prices rose slightly. The December delivery gold futures contract on the COMEX rose 0.3% to $4199.30 per ounce, marking the seventh increase in the past eight trading days. The December delivery silver futures contract on the other hand dropped 0.1% to $57.921 per ounce. Earlier, weak private employment data released in the US showed a decrease of 32,000 jobs in November, reinforcing expectations in the market for a rate cut by the Federal Reserve in December. Stephen Brown of Kayapu Macro said in a report, "Even if the Federal Reserve cuts rates further next week, it may still signal a more hawkish outlook on future easing policies." Currently, CME's Federal Reserve Watch Tool shows that the probability of a Fed rate cut is as high as 89%.