Silver Crashes 17% in Violent Reversal as Historic Metals Rally Unravels

Silver’s once-blistering rally hit a wall—and then fell straight through it.

The white metal plunged as much as 17% during Asian trading on Thursday, briefly erasing a two-day rebound and reigniting fears that last week’s historic sell-off is far from over. Although prices later pared losses to around 11% by mid-morning in Europe, the damage was already done: silver is now more than one-third below its all-time high set just last week.

For a market that had looked unstoppable only days ago, the speed and scale of the reversal have stunned traders.

Silver’s collapse comes after a record-breaking surge that many now admit ran too hot. A rebound in the US dollar last week triggered a rapid unwinding of bullish bets, dragging commodities lower and exposing just how crowded the trade had become.

The broader precious metals complex has been on a tear for over a year, fueled by speculative momentum in China, geopolitical turmoil, and growing concerns over the independence of the US Federal Reserve. That optimism evaporated abruptly at the end of last week.

Friday marked a turning point: silver suffered its biggest-ever one-day drop, while gold plunged the most since 2013. What followed was a cascade of forced selling that continues to ripple through markets.

“Sentiment seems to have turned soggy across most asset classes, including regional equities and metals,” said Christopher Wong, a strategist at Oversea-Chinese Banking Corp. He warned that thin liquidity is amplifying price swings, creating a dangerous feedback loop where falling prices trigger more selling—and even thinner trading.

The shock has spilled into other corners of the metals market. Copper slid as much as 1.5%, slipping below $13,000 a ton, while spot gold fell up to 3.5% in choppy trading. Platinum and palladium also moved lower.

Behind the chaos lies a familiar culprit: leverage.

Throughout January, investors piled aggressively into precious metals via leveraged exchange-traded products and a surge in call-option buying. When prices began falling during Asian hours on Friday, stop-losses and margin calls kicked in, unleashing a wave of selling that has yet to fully subside.

Silver’s inherent volatility has only magnified the damage. With a smaller market than gold, price swings are naturally sharper—but recent moves stand out even by silver’s standards. Heavy speculative inflows and thin over-the-counter trading have exaggerated every tick.

The turmoil has also strained the plumbing of the market itself. Banks that dominate London’s OTC spot trading have struggled to make markets as even brief long or short positions have become too risky. Rising prices had already stretched the credit lines available to precious metals trading desks, traders said, worsening liquidity just as volatility exploded.

Markets are now trying to price in the policy implications of Kevin Warsh’s nomination as Federal Reserve chair. President Donald Trump said this week he would not have nominated Warsh had he wanted to raise interest rates, adding that there is “not much” doubt the Fed will cut rates again.

Rate cuts are typically a tailwind for precious metals, which don’t pay interest—but for now, policy uncertainty is adding to volatility rather than calming it.

Gold prices are “likely to remain volatile until there is greater certainty on the monetary policy outlook,” Standard Chartered analysts, including Sudakshina Unnikrishnan, wrote. They noted that near-term pressure may come from investors redeeming holdings in exchange-traded products, even as longer-term fundamentals remain supportive.

Strategists are now laser-focused on key psychological levels.

“Traders will be watching for this week’s nadir just above $71,” Bloomberg strategists noted, adding that the $70 mark could be even more critical. Silver hasn’t traded in the $60s since December, and a return to that range could deepen risk aversion across global markets.

As of 10:50 a.m. in London, silver was trading lower at around $73 an ounce, while gold, platinum, and palladium remained under pressure. Meanwhile, the Bloomberg Dollar Spot Index rose, adding another headwind for metals.

What looked like a relentless bull run has morphed into one of the most violent reversals the precious metals market has seen in years.

For silver, the message is clear: in a market driven by leverage, thin liquidity, and shifting macro narratives, rallies can evaporate just as fast as they appear. And after this week’s shock, investors are no longer asking how high silver can go—but how much further it can fall before calm returns.