Silver price suffers biggest loss since 2021; gold price falls from record

Silver tumbled sharply from a record high above $83 an ounce on Monday, as traders booked profits on a metal that has rallied by over 40% for the past month. Gold followed a similar path but with a less drastic decline.

Earlier, spot prices had soared to as high as $83.63 per ounce during Asian trading hours on surging Chinese investment demand. Premiums for spot silver in Shanghai were above $8 an ounce over London prices, the biggest spread on record.

However, silver prices have since fallen by nearly 10% to the low $70s, sending the metal down to a weekly low and towards its biggest intraday decline since 2021.

Despite this single-day collapse, silver remains one of the best-performing assets of 2025 with a gain of 148%. During its record-breaking run hours prior, the precious metal’s market capitalization even surpassed that of AI tech giant Nvidia ($4.55 trillion).

Gold, which also hit a record of $4,543.51 per ounce earlier, was down by more than 4.5% on the precious metals pullback. Year to date, the safe-haven metal has risen by nearly three-quarters.

Silver momentum

Silver’s rally has been gaining momentum since the end of November, as a “perfect storm” of factors including a Federal Reserve interest rate cut, a healthy demand outlook and concerns over supply shortages drove prices higher.

The metal’s last big run came during the historic squeeze in London in October that eroded global inventories. While London’s vaults have seen significant inflows since then, but much of the world’s available silver remains in New York as traders wait for the outcome of a US probe that could lead to tariffs or other trade restrictions.

Silver’s 14-day relative strength index — a gauge of buying and selling momentum  — showed a reading of about 67 after staying above 70 for the past three weeks. A reading above 70 is considered overbought.

Earlier this month, a Chinese fund warned that investors could be exposed to heavy losses should silver’s bull market suddenly turn. The fund’s premium ballooned last week to more than 60% over the value of its underlying assets — silver contracts on the Shanghai Futures Exchange.

Looking ahead, market participants, especially those in Asia, see higher upside for the metal. “Silver could quite feasibly be trading in the $90-$100 range next year whilst supply shortfalls remain an overarching theme for the precious metals market,” said Tim Waterer, chief market analyst at KCM Trade.

(With files from Bloomberg)

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