Silver loses more than half its value from record high: What went wrong

Benchmarks Nifty23,053.10116.35FEATURED FUNDS★★★★★UTI Aggressive Hybrid Fund Regular Plan-Growth5Y Return9.02 % Invest NowFEATURED FUNDS★★★★★Motilal Oswal Midcap Fund Direct-Growth5Y Return18.55 % Invest NowEnter search text:

The Economic Times daily newspaper is available online now. Read Today's Paper Silver loses more than half its value from record high: What went wrong and will it recover?By Hareesh V, ET CONTRIBUTORSLast Updated: Oct 31, 2026, 02:33:00 PM ISTSynopsis

Silver has plunged more than 58% from its February record high of nearly $120 an ounce to around $50, as profit-booking, weaker industrial demand and shifting macroeconomic conditions weigh on prices. Geojit’s Hareesh V explains what drove the rally, why it unravelled and what could shape silver’s recovery.

After years of lagging behind gold and trading in a broad consolidation range, silver staged an exceptional rally this year, surging to a record high of nearly $120 an ounce in the London spot market in February. Domestic prices in India also scaled unprecedented levels, supported by robust industrial demand, tight supplies, strong investment inflows, and speculative buying. The rally briefly made silver one of the best-performing commodities and attracted significant investor participation.

However, the uptrend proved unsustainable. Following its historic peak, silver entered a prolonged correction as investor optimism faded amid profit-booking, slower industrial demand growth, and changing macroeconomic conditions. Prices gradually retreated throughout the year and slipped to $50 an ounce this week, marking a decline of more than 58% from the February high. The sharp reversal has reignited concerns over the durability of silver's bull run. Although long-term demand from renewable energy and electronics remains supportive, the market is increasingly reassessing growth expectations and pricing in a more cautious outlook amid global economic uncertainty.

Why did silver prices reach a record high?

Silver's rally to record highs was fueled by a combination of strong industrial demand, tightening supplies, and robust investment inflows. Demand from solar panels, electric vehicles, semiconductors, and advanced electronics surged, reinforcing silver's role as a critical industrial metal. At the same time, persistent supply deficits emerged as mine production struggled to keep pace with growing consumption.

On the investment side, silver benefited from rising concerns over inflation, currency weakness, mounting government debt, and geopolitical uncertainties, prompting investors to increase exposure to precious metals. The metal also rode on gold's bullish momentum, attracting speculative buying due to its smaller market size and higher volatility. Expectations of monetary easing by major central banks further boosted investor appetite. With strong industrial consumption coinciding with tight physical supplies and increased fund participation, silver prices rallied sharply, reaching record highs in both international and Indian markets earlier this year.

Why have silver prices fallen so sharply this year?

The sharp correction in silver prices reflects a significant reassessment of the bullish expectations that had driven the metal to record highs earlier this year. Following the rally, extensive profit-booking by hedge funds, institutional investors, and speculative traders accelerated the decline. Industrial demand growth also fell short of the lofty projections priced into the market, as weaker economic activity in major consuming regions, particularly China and Europe, weighed on manufacturing demand.

Live Events

A stronger US dollar and periods of elevated real interest rates further reduced the appeal of non-yielding assets such as silver. Investment demand weakened as exchange-traded funds (ETFs) witnessed outflows, with investors reallocating funds to cash and fixed-income assets. Meanwhile, some industrial consumers postponed purchases in anticipation of lower prices. The combination of long liquidation, softer industrial demand, and changing macroeconomic conditions resulted in silver prices losing more than half of their value from the peak reached earlier this year.

How is the supply-demand scenario?

Despite the sharp correction in prices, the global silver market continues to face a relatively tight supply-demand balance. Demand remains supported by the growing use of silver in solar panels, electric vehicles, electronics, batteries, and medical applications, making it one of the most important industrial precious metals. However, supply growth has been limited, as a large portion of global silver output is produced as a by-product of lead, zinc, copper, and gold mining, restricting producers' ability to quickly increase production in response to price movements.

That said, weakening economic growth and lower prices are expected to moderate industrial demand in the near term. At the same time, increased recycling activity could add secondary supply to the market. While supply deficits may persist, the imbalance appears less severe than earlier anticipated, reducing some of the bullish momentum that had previously supported silver prices.

Investment demand and why geopolitical tensions have not supported silver

Silver occupies a unique position as both a precious and industrial metal, but during periods of geopolitical uncertainty investors generally favour gold over silver. Gold enjoys stronger safe-haven credentials, deeper liquidity, lower volatility, and continued purchases by central banks, making it the preferred defensive asset during times of crisis. As a result, much of the safe-haven capital generated by geopolitical tensions this year has flowed into gold rather than silver.

At the same time, silver's heavy dependence on industrial demand has limited its appeal. More than half of global silver consumption comes from industrial applications, making the metal vulnerable to concerns about slowing economic growth and weaker manufacturing activity. Consequently, while geopolitical tensions have supported precious metals in general, concerns over slowing industrial demand have largely offset any safe-haven buying in silver, keeping prices under sustained pressure.

Outlook: Why a break below $50 could be significant

The $50-per-ounce level is emerging as a key psychological and technical support for silver. A sustained break below this threshold could trigger fresh selling from speculative funds and momentum traders, increasing downside pressure. The sharp correction from this year's record highs suggests the market is moving away from the highly bullish environment that previously supported prices. While long-term demand from solar energy, electric vehicles, semiconductors, and green technologies remains constructive, these factors may not be sufficient to support prices in the near term. If global growth remains weak and investment demand fails to recover, silver could remain vulnerable to further declines. Therefore, long-term investors may consider waiting for price stabilization before building fresh positions.

(The author is Head of Commodity Research, Geojit Investments Limited)

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
Add as a Reliable and Trusted News Source Add Now!
(You can now subscribe to our ETMarkets WhatsApp channel)
(Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of www.economictimes.com.)Read More News onsilver price crashsilver price forecastsilver price todaysilver record highwhy silver prices are fallingsilver market outlooksilver supply and demandsilver investment strategy

(What's moving Sensex and Nifty Track latest market news, stock tips, Budget 2025, Share Market on Budget 2025 and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .)

Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price

...moreless
(You can now subscribe to our ETMarkets WhatsApp channel)
Read More News onsilver price crashsilver price forecastsilver price todaysilver record highwhy silver prices are fallingsilver market outlooksilver supply and demandsilver investment strategy

(What's moving Sensex and Nifty Track latest market news, stock tips, Budget 2025, Share Market on Budget 2025 and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .)

Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price

...morelessPrime ExclusivesInvestment IdeasStock Report PlusePaperWealth Edition

• Can new data protection law guard against SBI-like data breaches?

• KYB and KYC: Quick commerce, the Damani premium and what DMart must deliver – 3rd and concluding part

• The tough business behind the walls

• KYC and KYB: Inside Damani’s DMart, the retail chain for the middle class. And stock for the long term? – Part 2 of 3

• Will it be a regulatory nightmare if an exchange lists on its own platform?

• KYC and KYB: Inside Damani’s Avenue Supermarts that refuses to charge more – Part 1 of 3

• 1
• 2
• 3

View all StoriesContinue reading with one of these options:Limited AccessFreeLogin to get access to some exclusive stories
& personalised newslettersLogin NowUnlimited AccessStarting @ Rs120/monthGet access to exclusive stories, expert opinions &
in-depth stock reportsSubscribe NowET

Unlock Access to All Exclusives with ETPrime FREE TRIAL

15 Days Free: Unlock All ETPrime Exclusives, Market Tools & ePapers

Trial offer expiring in00 : 05 : 00

I'd rather pay ₹2599 now

Uh-oh! This is an exclusive story available for selected readers only.

Worry not. You’re just a step away.

Prime Account Detected!

It seems like you're already an ETPrime member with

Login using your ET Prime credentials to enjoy all member benefits

Log out of your current logged-in account and log in again using your ET Prime credentials to enjoy all member benefits.

Unlock ETPrime's Exclusive Stories Today!

Big Price Drop! Flat 40% Off

Student Only OfferAlready a Member? Sign In nowAlready a Member? Sign In nowAlready a Member? Sign In now

Offer Exclusively For You

Save up to Rs. 700/-

ON ET PRIME MEMBERSHIP

Avail Offer

Offer Exclusively For You

Get 1 Year Free

With 1 and 2-Year ET prime membership

Avail Offer

Offer Exclusively For You

Get 1 Year Free

With 1 and 2-Year ET prime membership

Avail Offer

Offer Exclusively For You

Get Flat 40% Off

Then ₹ 1749 for 1 year

Avail Offer

Offer Exclusively For You

ET Prime at ₹ 49 for 1 month

Then ₹ 1749 for 1 year

Avail Offer

Special Offer

Get flat 40% off on ETPrime

Avail OfferAvail OfferClaim NowAlready a Member? Sign In now

Need Assistance?

Connect with an ETPrime expert for personalized support and guidance

+91 9484700004'; }); } if(listing) { var h3 = "You tried reading " + listArr.length + " locked stories in the past " + threshold + " days.", h4 = "Become an ET Prime member and don't miss out on these exclusive stories."; var html = '

' + h3 + '

' + h4 + '

' + listing + '

'; $('#paidSCWidget').html(html); var callback = $('#paidSCWidget').attr('data-callback'); if(callback && window[callback]) { window[callback](); } customDimension.dimension72 += ' | Shown SYFT no Trial_With Missed Paywalled Articles Collection'; } else { _processNormal() } } }); } else { _processNormal(); } } catch (e) { _processNormal(); } }, function () { _processNormal(); }); //console.log('storyCollectionLoad', $); }

What’s Included with

ETPrime Membership

1Exclusive Insights That Matter

Uncover the truth with our investigative stories

Make strategic moves using the real-world case studies

Read industry-specific stories to identify emerging trends

Spot opportunities with
in-depth insights that matter

• Trump temper on H-1B visas is forcing Indians to do these things to stay put in US

  What Adani’s US indictment means for India Inc’s overseas fundraising

• Why veterans like Reliance, L&T are on acquisition spree? Aswath Damodaran has an answer.

  Will China’s dollar bond sale in Saudi Arabia trump the US in financial world?

• Huawei launches its own OS to compete with Google and Apple. But can it win beyond China?

  The problem with lab grown diamonds

• Why a falling rupee is a better option for the economy

  A list of top 20 momentum stocks that have delivered massive returns in one year

2Invest Wisely With Smart Market Tools & Investment Ideas

Alpha Trade

Get daily trade ideas from SEBI-registered research analysts.

Investment Ideas

Grow your wealth with stock ideas & sectoral trends.

Stock Reports Plus

All-in-one stock research with Stock Score, peer comparison & key signals.

BigBull Portfolio

Get to know where the market bulls are investing to identify the right stocks.

Stock Analyzer

Check the score based on the company's fundamentals, solvency, growth, risk & ownership to decide the right stocks.

Market Mood

Analyze the market sentiments & identify the trend reversal for strategic decisions.

Stock Talk Live at 9 AM Daily

Ask your stock queries & get assured replies by ET appointed, SEBI registered experts.

3Stay informed anytime, anywhere with ET ePaper

ePaper - Print View

Read the PDF version of ET newspaper. Download & access it offline anytime.

ePaper - Digital View

Read your daily newspaper in Digital View & get it delivered to your inbox everyday.

Wealth Edition

Manage your money efficiently with this weekly money management guide.

TOI ePaper

Read the PDF version of TOI newspaper. Download & access it offline anytime.

Deep Explainers

Explore the In-depth explanation of complex topics for everyday life decisions.

Health+ Stories

Get fitter with daily health insights committed to your well-being.

Personal Finance+ Stories

Manage your wealth better with in-depth insights & updates on finance.

5Enjoy Complimentary Subscriptions From Top Brands

Stream new documentaries from all across the world every day.

Stories you might be interested in