The price of silver saw a significant fall today on December 29, 2025, following a very strong run up over the last year when virtually all other asset classes were performing poorly compared to silver.  Following the record highs of silver achieved today, many market participants have now begun to sell their silver holdings as they anticipate a continued decline in prices in the future.  The volatility of silver today has shown everyone that a strong bull market can rapidly reverse even after a period of historic gains.

The Record Price Before the Crash

Earlier today silver experienced a significant increase, briefly reaching an all-time high of over $80 an ounce on international marketplaces.  In India, MCX silver futures reached an all-time high of over ₹2,54,000/kg.  This price surge followed one of the most extreme rallies in the history of commodities due to industrial demand, supply shortages and political instability around the world.  Unfortunately, before market participants could fully enjoy the thrill of owning this new record price, prices dropped by nearly 8%, losing as much as ₹21,000/kg within an hour of reaching record levels.

Massive Profit Booking by Investors

Today’s collapse of prices was largely driven by massive profit bookings as price have increased extremely well over the last year.  Price movements within silver continue to reflect the astronomical gains investors have made this year with up to 180% gains over an extremely short amount of a time. Once the price surpassed the technical target of $80 or beyond from a psychological level, a large number of institutional and retail traders took profit and left the market. The subsequent sell-off was initially created by stop loss orders being triggered by the decline, and then additional orders would begin to sell in greater volume due to a panic in selling pressure caused by the sell-off.

Easing geopolitical tensions in Europe have also aided precious metals, as we have seen the “safe” haven for investors in precious metals diminish on this news and the positive response of investors to the prospects of a peace deal between the United States and Ukraine via the phone call between US President Trump and Ukrainian President Zelensky. Investment dollars have left the defensive asset classes of silver and gold into the riskier “long” equity markets due to the reduction in “war risk premium.”

Lastly, there were technical reasons contributing to the velocity of this market correction. The Chicago Mercantile Exchange released a margin increase notice for silver contracts, which will increase the price that traders pay to hold large leveraged positions, resulting in many traders being forced to liquidate their positions. We had previously noted that silver had reached extreme overbought conditions based on its trading above the 200 day moving average.

Outlook for Supply and Demand in the Industry

Although the recent crash in the market for silver has been severe, the fundamentals that support the silver market remain complicated. While the price of silver is down sharply as a result of the crash, it is likely that the long-term supply deficit will continue to be an important driver of demand for silver over time. China is expected to put into effect a new export licensing system beginning January 1, 2026, which many expect will reduce the availability of silver in global markets. The demand for silver in the solar panel, electric vehicle and artificial intelligence infrastructure industries continues to be strong. Some believe that today’s crash may represent a healthy period of consolidation following a quick price movement that could not be sustained.

What to Do Regarding your Investment in Silver

As we emerge from today’s extreme volatility, market analysts are advising investors to exercise caution with their silver investments. Key support levels, which are now being closely monitored, include ₹2,30,000 on the MCX and $75 internationally. While the long-term bullish case for silver is underpinned by demand for industrial uses, this time of easy profits in the silver market may be evolving into a period of increased volatility and price fluctuations.