Silver is experiencing a sharp drop of over 10 percent, breaking below the 80 USD per ounce level. This reflects a brutal correction following the record rally of 2025. It does not signal a collapse in supply-demand fundamentals but is primarily driven by forced liquidation of leveraged speculative positions, amplified by higher margin requirements on the market and a stronger US dollar.
The immediate causes of the tumble are market reactions to CME decisions, which hit heavily leveraged short-term speculators holding long positions from the peaks above 120 USD. Today's drop below 80 USD, combined with a short-term rebound after the initial crash, fits the classic pattern of profit-taking and unwinding of excessive leverage.
Broader macro factors are also influencing price movements. The appointment of a new Fed chair has reduced the appeal of precious metals and strengthened the dollar. Part of silver's earlier gains, which saw nearly 200 percent growth year-on-year in 2025, were based on expectations of aggressive interest rate cuts. The revision of these expectations is triggering a capital rotation toward equities, particularly in the technology sector, which has posted strong results.
After the sharp correction, the silver market remains highly unstable. In the coming weeks, extreme volatility can be expected, and further downward moves or sharp rebounds could occur at any time.
Source: xStation5
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