Silver Slides Sharply After Blasting Past $80 to a New Record
Silver’s record-breaking rally flipped into a violent selloff on Monday, December 29, 2025, with prices plunging after briefly surging above $80 per ounce and touching a new all-time high near the mid-$80s in early trade.
After hitting the record, silver reversed hard as traders rushed to lock in profits, volatility spiked, and market conditions turned especially unstable in thin, year-end trading.
What Happened to Silver Prices Today?
Silver Retreats Sharply After Historic Surge Above $80
Silver’s intraday range was extreme:
- High: roughly $83–$84/oz during the earlier surge.
- Low / pullback: prices later slid toward the low-$70s, with reports showing drops of ~8% to nearly 9% at points in the session.
The swing capped off what had been a stunning run: silver was reported to have climbed from around $50 in November to above $80 in late December.
Other reporting described silver as having more than doubled over the year’s broader surge, reflecting both investor and industrial demand pressures.
Why Did Silver Drop So Fast?
Several catalysts collided at the same time, turning a sharp pullback into a fast, cascading move:
1) Profit-taking after a “blow-off” rally
Silver had been accelerating into year-end, and once it set new record highs, many leveraged traders and short-term funds began taking profits aggressively—a common trigger for sudden reversals after parabolic moves.
2) CME margin hikes increased pressure on leveraged positions
A major added shock was the Chicago Mercantile Exchange (CME) raising margin requirements for precious-metals futures, which forces traders to post more cash to maintain positions. In fast markets, that can spark forced selling as some participants reduce exposure rather than add collateral.
3) Thin year-end liquidity amplified volatility
Late December trading often comes with fewer participants and thinner order books. That environment can exaggerate moves in both directions—especially in crowded trades. Financial Times
4) A firmer U.S. dollar and shifting “safe-haven” tone
Broader market narratives also mattered. When the U.S. dollar stabilizes or strengthens, it can pressure dollar-priced commodities by making them more expensive for non-U.S. buyers. At the same time, any easing in fear-driven flows can reduce demand for precious metals.
Macro Drivers Behind the Silver Surge
Even with the sudden drop, the backdrop that powered silver higher hasn’t disappeared. Key drivers cited by market coverage include:
- Industrial demand: silver is crucial for solar panels and increasingly important for electrification and advanced tech supply chains (including heavy computing infrastructure). AP News
- Supply constraints: concerns about mine output and available supply helped feed the rally narrative.
- Speculative momentum: once prices began breaking key levels, more momentum buying entered the market, which can accelerate rallies—and also make reversals sharper. Financial Times
Markets Focus: Fed Minutes and 2026 Rate-Cut Expectations
Investors are also watching the Federal Reserve closely, because interest-rate expectations can heavily influence the dollar, bond yields, and the appetite for non-yielding assets like precious metals.
Minutes from the Fed’s December meeting are scheduled for release on Tuesday, December 30. Federal Reserve
That meeting saw the Fed cut rates to a 3.5%–3.75% range, a decision that highlighted notable internal disagreement among policymakers. Financial Times
According to CME’s FedWatch framework as cited by market commentary, traders were leaning toward a rate hold in January 2026 (roughly low-80% odds), with a smaller probability for a cut. Economies.com
If the minutes sound more cautious than markets expect, it could support the dollar and weigh on metals; if they lean dovish, it could reignite the bullish case.
Geopolitics: Ukraine Headlines and Risk Sentiment
Geopolitical headlines have also been part of the metals story—supporting safe-haven demand during tense periods. On Monday, markets weighed signals of progress in U.S.-Ukraine discussions while acknowledging that major issues remain unresolved, adding another layer to risk sentiment. The Guardian
What’s Next for Silver?
After such a dramatic move, the next phase often becomes a tug-of-war between:
- buyers who still believe in the longer-term supply/demand story, and
- traders reducing risk after a volatility shock (especially after margin increases).
Some analysts argue that if rate cuts resume in 2026 and industrial demand remains strong while supply stays tight, silver could eventually push toward $100/oz in 2026—though the road there may be volatile. Kitco
Key Levels and What Traders Will Watch
In the near term, watch for:
- Stabilization after forced selling: whether silver can hold above key psychological and technical zones after the margin-driven liquidation. AP News
- Dollar direction and real yields: a stronger dollar and rising yields can pressure metals; the opposite can support them.
- Post-minutes repricing: Fed minutes can swing rate expectations quickly and reprice metals accordingly. Federal Reserve
Disclaimer
This article is for informational purposes only and does not constitute financial or investment advice. Markets are volatile, and prices can change rapidly.