Silver resumes its slide, plunging 11%, after short-lived rebound

Silver prices fell as much as 16% on Thursday, leaving behind a two-day recovery as the white metal continued to be hit by extreme volatility.

Spot silver prices were last down over 11% to around $78.3 per ounce. futures There was a drop of over 8 percent from $77 per ounce in New York. Meanwhile, spot gold and futures fell nearly 2% to $4,865.5 and $4,891 per ounce, respectively.

Silver rose to a record high before falling almost 30% last Friday. According to LSEG data, there was an increase of approximately 146% in 2025.

Analysts point to speculative flows, leveraged positioning and options-driven trading rather than physical demand as the main drivers of recent price swings.

“You’ve seen a lot of speculator positions build up… I don’t think it’s been completely eliminated,” said Sunil Garg, managing director of Lighthouse Canton.

While Garg says the fundamental situation for silver demand is still valid, he recommends waiting a little longer for speculative positions to be “erased” first. Silver has a wide range of industrial and technological uses, ranging from solar energy to catalysts and electronics, among others.

“Increased margin requirements by various metal exchanges around the world… this is just something to eliminate some speculation,” Garg said. CME Group increased margin requirements After the sharp sales last Friday.

“As prices fell, dealer hedging turned from buying strength to selling weakness, triggering investor halts and cascading losses throughout the system,” Goldman Sachs said in a note Wednesday. he said.

The correction in silver has been greater than in gold due to tight liquidity conditions that have increased price volatility in the London market.

The timing of the volatility suggests Western flows rather than Chinese speculation are behind the growth and easing, with many of the more violent moves occurring while Chinese futures markets were closed, Goldman said.

The volatility in silver prices has led to increased comparisons to meme stocks like GameStop, the video game retailer that became a global phenomenon in 2021 after retail traders on Reddit piled on en masse, sending its shares soaring far beyond what traditional valuation models would justify.

Market watchers had warned that prices were breaking away from sustainable levels, making the silver trade increasingly a meme.

Steve Sosnick, chief strategist at Interactive Brokers, said the precious metals theme has captured public attention and “led to momentum that exceeds even the outsized moves we’ve seen across a wide range of speculative assets.”