Silver bars are stacked in a safe deposit box at the Pro Aurum Goldhaus in Munich, Germany, on January 10, 2025.
Angelica Warmsreuter
Silver prices fell as much as 16% on Thursday, ending a two-day rally as the white metal continued to reel from excessive volatility.
Spot silver prices were trading nearly 12% lower at $77.42 an ounce as of 8:32 a.m. ET. futures In New York, it was down about 9% to $76 an ounce. Meanwhile, spot gold fell about 2% to $4,860 an ounce, and futures fell 1.5% to $4,881.
Silver was on a record rally until last Friday, when it crashed nearly 30%. According to LSEG data, it rose by about 146% in 2025.
Analysts say speculative flows, leveraged positioning and options-driven trading, rather than physical demand, have been the main drivers of recent price movements.
“We’ve seen a lot of speculative positions build up, and I don’t think it’s fully resolved,” said Sunil Garg, managing director at Lighthouse Canton.
While Garg says the fundamental case for silver demand still holds true, he advises waiting a little longer for speculative positions to be “cleaned out” first. Silver is used in a wide range of industrial and technological applications, including photovoltaics, catalysis, and electronics.
“Margin requirements have been increased by various metal exchanges across the world, but this only negates some of the speculation,” Garg said. CME Group raised margin requirements following last Friday’s sharp decline.
“As prices fell, dealer hedges turned from buying to selling, triggering investor stopouts and cascading losses through the system,” Goldman Sachs said in a note Wednesday.
Silver price over the past year
Silver’s correction was larger than gold’s as liquidity in the London market tightened and price volatility widened.
Goldman said the timing of the volatility suggests that Western flows, rather than Chinese speculation, are behind much of the rally and unwinding, noting that most of the wilder moves occurred while China’s futures markets were closed.
Fluctuations in silver prices have led to increased comparisons to meme stocks like GameStop. GameStop is the video game retailer that became a global phenomenon in 2021 after retail traders on Reddit flocked together and sent the stock soaring far beyond what traditional valuation models could justify.
Market watchers had warned that prices were moving away from sustainable levels and that silver trading was becoming increasingly meme-like.
Steve Sosnick, chief strategist at Interactive Brokers, said the topic of precious metals has captured the public’s attention and “traded at a rate that exceeded any of the outsized moves we’ve seen in a wide range of speculative assets.”
