On Monday, December 29, in overnight trading, silver futures plummeted significantly after breaking through the $80 per ounce mark for the first time, with a 7% drop. The latest trading price is around $71.79 to $72 per ounce. Silver experienced a 15% drop from peak to trough within the day, marking the largest intraday high-to-low percentage drop since a 16.85% decline in August 2020.
According to a report by CNBC, Jeff Kilburg, Chief Investment Officer at KKM Financial, commented, “This is a historic volatility that we haven’t seen in a long time.” He attributed this pullback to profit-taking and year-end tax loss harvesting, which affected silver’s momentum after a significant rise earlier this year.
Despite the pullback, starting from just over $20 per ounce at the beginning of 2025, silver’s gains for the year still exceed 140%.
This performance has put silver ahead of gold this year. Gold futures for delivery in February broke through $4550 for the first time this month, with gains exceeding 60% for the year, but saw a drop of about 4.6% on Monday. Other precious metals also experienced declines, with platinum falling over 14% from its early high.
The reasons for silver’s significant consecutive rise earlier included several factors. Similar to gold, silver is seen as a safe-haven asset for investors in the face of escalating geopolitical tensions, rising U.S. national debt, inflation, and other risks. Both metals are also considered store-of-value assets that can hedge against a weakening U.S. dollar caused by inflation or economic uncertainty.
Furthermore, the weakening U.S. dollar has made silver more attractive to other countries, driving an increase in demand. Silver price hikes also benefited from strong industrial demand for electronic products such as solar panels, data centers, and electric vehicles.
Last week, exchange operator CME Group announced an increase in margin requirements for silver trading starting on Monday, meaning traders need to deposit more cash.
Brent Donnelly, President of Spectra Markets, previously stated that silver tends to skyrocket parabolically and then suddenly collapse. Goldman Sachs economists had predicted back in October that silver’s volatility would be greater than gold and that it faced higher downside risks.
However, some analysts believe that silver may rebound in the future. Charu Chanana, Chief Investment Strategist at Sheng Bao Bank, pointed out that the overall picture for precious metals remains supported by factors such as looser interest rates, ongoing fiscal and geopolitical uncertainty, and the demand for portfolio diversification, suggesting that any pullback could be seen as an opportunity for long-term investors to rebuild positions.
Giovanni Staunovo, an analyst at UBS, indicated that the prospect of a U.S. interest rate cut continues to support demand for gold and silver, projecting them to new highs.
According to The Wall Street Journal, soaring prices have sparked speculative buying interest from amateur investors, with the Reddit investment community shifting its focus to silver in anticipation of further price increases.
Kilburg expects that this demand will continue to drive silver prices up in 2026, potentially climbing to $90 or $100, which would represent roughly a 27% or 40% increase from the latest levels. He believes the current pullback is just a year-end reset, and a combination of supply and demand issues will push silver prices higher in the future, indicating that the upward momentum is far from over.
In addition, on Saturday, December 27, the world’s richest person, Elon Musk, issued a warning regarding the Chinese government’s restriction on silver exports.
According to a post on the social media platform X, Musk responded to a “Bull Theory” shared by Jesse Peltan, stating that the Chinese authorities are preparing to impose restrictions on silver exports starting January 1, 2026, requiring companies to obtain government permits for exports. Peltan noted that the impact of this move is significant.
In response to Peltan’s post, Musk stated, “This is not good. Many industrial processes rely on silver.”