Silver Crashes After Record $84 Peak as Profit-Taking Triggers Sharpest Drop Since 2021

Silver prices experienced a dramatic reversal after hitting an all-time high, underscoring how quickly momentum can shift in global commodity markets. After surging to a historic $84 per ounce, the precious metal came under intense selling pressure as investors moved to lock in profits and major exchanges adjusted margin requirements for futures trading.

The sudden downturn marked a sharp contrast to silver’s rapid ascent, which had positioned it as one of the strongest-performing assets of the year. Instead of extending gains, the metal entered a phase of heightened volatility, reflecting changing risk perceptions and shifting market dynamics.

Sharpest Daily Decline in More Than Three Years

In international markets, silver’s ounce price fell 7.18% in a single session, registering its steepest daily decline since 2 February 2021. On that date, prices had dropped by 8.21%, a benchmark that underscores how severe the latest pullback has been.

The sell-off pushed silver away from its record high in a matter of hours, forcing prices to test significantly lower levels. Analysts noted that such sharp corrections are often seen after parabolic rallies, particularly when speculative positioning becomes crowded and external triggers accelerate exits.

From Strong Rally to Volatile Trading

The broader context helps explain why the correction was so abrupt. Silver began the year at approximately $28.9 per ounce, before entering a powerful upward trend in the early months. A combination of macroeconomic and geopolitical factors fueled demand, including trade policy rhetoric from U.S. President Donald Trump, uncertainty surrounding global monetary policy, and ongoing geopolitical tensions.

During the first half of the year alone, silver prices climbed by roughly 25%, reflecting growing investor interest in precious metals as both inflation hedges and alternative assets. That momentum only intensified as the year progressed, drawing in institutional and retail investors alike.

Breaking the $50 Barrier and Beyond

A major psychological milestone came on 9 October, when silver surpassed $50 per ounce for the first time in history. The rally accelerated further as demand from central banks increased, inflows into exchange-traded funds gained pace, and expectations grew that the Federal Reserve might move toward interest rate cuts.

Prices continued climbing, reaching $79.3 by the end of last week before surging to a record $84. Since the beginning of the year, silver’s total appreciation exceeded 150%, placing it among the top-performing commodities globally. Reports from China suggested that physical silver prices were approaching $90 per ounce, highlighting intense regional demand.

Margin Changes and Profit-Taking Hit Prices

Despite the bullish backdrop, conditions shifted rapidly once prices peaked. A relative easing of geopolitical risks reduced safe-haven demand, while investors increasingly opted to realize gains after the historic run-up.

At the same time, decisions by the London Metal Exchange and the Chicago Mercantile Exchange to revise margin requirements for silver futures added further pressure. Higher collateral requirements can force leveraged traders to reduce positions, often amplifying downward price movements during periods of stress.

These combined factors triggered a swift and forceful correction, pulling silver sharply lower in a short timeframe.

Partial Rebound Signals Ongoing Volatility

Following the steep decline, silver prices showed signs of stabilization. In the latest trading session, the metal recovered part of its losses, rising 2.4% to around $74.6 per ounce. While the rebound suggests renewed buying interest at lower levels, market participants remain cautious.

Analysts warn that silver may continue to experience wide price swings as markets reassess valuations, monitor central bank signals, and respond to evolving geopolitical developments. The transition from a one-way rally to a more volatile trading range appears increasingly likely.

What Comes Next for Silver?

The recent correction has not erased silver’s strong longer-term performance, but it has highlighted the risks associated with rapid price appreciation. As speculative positioning unwinds and regulatory adjustments take effect, investors are expected to remain sensitive to both macroeconomic signals and exchange-level policy decisions.

Whether silver resumes its upward trajectory or consolidates at lower levels will depend on factors such as global interest rate expectations, industrial demand trends, and investor appetite for risk. For now, the metal’s dramatic rise—and equally dramatic pullback—serves as a reminder of how quickly sentiment can turn in the commodities market.