- Spot silver prices have extended losses beyond an initial 14.1% drop to $99.77/oz, reaching around $93.46/oz amid ongoing profit-taking after a record high of $121.64/oz, with a 42-56% monthly gain still intact.
- The decline follows a sharp rally driven by speculative buying, weak dollar reversal, and broader metals weakness, as prices correct from overbought levels.
- Analysts are split on the outlook, with some warning of a bubble pop while others remain bullish on long-term fundamentals.
Silver's Sharp Correction Intensifies
Spot silver prices have plunged further, last down 20% at $93.46 per ounce, as profit-taking accelerates after the metal's historic rally. This marks an extension beyond the initial 14.1% drop to $99.77/oz, with selling intensifying across precious and industrial metals. The decline comes despite silver still holding onto a remarkable 42-56% monthly gain from January, which saw prices hit an all-time high of $121.64/oz mid-month before the correction began.
Traders who rode the speculative wave are now locking in gains, according to market participants familiar with the matter. "The rally simply outpaced physical demand," one metals trader said, speaking on condition of anonymity. "We're seeing a classic unwind after such an extreme move." Silver ETFs have led the losses, with the metal's smaller market amplifying volatility compared to gold, which is also down more than 5%.
Broader Metals Weakness and Economic Factors
The selloff isn't isolated to silver. Gold, platinum, palladium, copper, and nickel have all faced pressure, creating a drag effect. A stronger U.S. dollar, rebounding from a four-year low, has raised costs for non-USD buyers and curbed overseas demand. Meanwhile, COMEX inventories have swelled to over 16,000 tonnes from around 10,000 in 2024, partly due to tariff fears on silver as a critical mineral—though these stockpiles haven't prevented the price slide.
Political developments are adding to the uncertainty. President Donald Trump's recent announcement of a new Federal Reserve Chair pick, with Kevin Warsh favored, is seen as hawkish and contrasts with bets on looser policy. The Fed held rates steady at its last meeting, with cuts now eyed for June as Chair Jerome Powell's term ends in May. Combined with Iran-U.S. tensions—Trump urging nuclear talks while Iran issues threats—the environment remains volatile for safe-haven assets.
Market Reactions and Future Outlook
Industrial users, from solar PV manufacturers to electronics firms, are watching closely, though some commentary suggests demand remains at 2008-crisis levels, potentially cushioning producers. Jewelers predict further crashes, while analysts debate whether this is a buying opportunity or the end of the rally. Efforts to reach major mining companies for comment were unsuccessful by publication time.
Short-term, volatility is expected to persist, with potential tests below $99.77 if hawkish policy signals strengthen. Long-term, bullish factors include global uncertainty, anticipated rate cuts, and robust investment and industrial demand. Citi analysts, for instance, remain optimistic, calling silver "like gold on steroids." But without a stabilization in the dollar or a shift in speculative flows, further correction is possible. The coming days will hinge on upcoming U.S. PPI data for policy clues and whether profit-taking subsides.
Correction: An earlier version misstated the percentage drop; it has been updated to reflect the 20% decline to $93.46/oz.