Silver prices dropped from a record high of over $83 an ounce on Monday as traders took profits, despite a significant 40% increase over the past month. Gold also followed suit, although its decline was less dramatic.
Earlier, during Asian trading hours, spot prices for silver had peaked at $83.63 an ounce, driven by increased demand from Chinese investors. The premium for physical silver in Shanghai reached more than $8 an ounce compared to London prices, marking an unprecedented gap.
Since that peak, however, silver prices have plummeted nearly 10%, settling in the low $70s, marking a weekly low and approaching the largest intraday drop since 2021.
Even with this steep decline, silver remains a standout performer in 2025, boasting a remarkable 148% increase. At one point during its last surge, the market capitalization of silver surpassed that of Nvidia, a tech giant valued at $4.55 trillion.
Gold also achieved a record high of $4,543.51 an ounce before experiencing a drop of over 4.5% as it stabilized. Year-to-date, the safe-haven metals have surged nearly 75%.
Silver Momentum
The upward trend in silver has been fueled since late November by favorable conditions, such as anticipated Federal Reserve rate cuts, positive demand forecasts, and worries over supply shortages.
The last significant downturn for silver took place during the historic crash in London back in October, which led to a reduction in global inventories. Although substantial amounts of silver have been deposited in London vaults since then, a considerable portion still resides in New York as traders await the results of a U.S. investigation that could impose tariffs and trade restrictions.
Silver’s 14-day relative strength index—an indicator of buying and selling momentum—hovered around 67 after spending three weeks above 70, which indicates an overbought condition.
This month, Chinese funds cautioned that investors might face considerable losses if the silver bull market reverses suddenly. Last week, the fund’s premium soared to over 60% of the value of its underlying asset, a silver contract on the Shanghai Futures Exchange.
Looking ahead, many market participants, particularly in Asia, foresee further potential gains for silver. “Supply shortages remain the dominant theme in precious metals markets, and silver could very likely trade between $90 and $100 next year,” stated Tim Waterer, chief market analyst at KCM Trade.
