Silver price crashes 6% after hitting $54 record high — Is this the end of silver’s historic rally — or ju
Silver experienced a sharp pullback, crashing more than 6% from its recent all-time high above $54 an ounce—its steepest drop in six months. The spot price in New York fell 4.4% to $51.88 an ounce, while gold also slipped 1.9%, with platinum and palladium posting losses amid a broader cooling in the precious metals market. This correction caused the historic rally in silver to pause, prompting questions about whether the rally is losing momentum.
The correction followed a historical intra-day drop of 16,715 points on the Indian Multi Commodity Exchange (MCX). This retreat was driven primarily by easing fears over U.S. credit risk and U.S.-China trade tensions after reassuring comments from President Donald Trump, which reduced demand for safe-haven assets like silver.
Additionally, positive results from regional U.S. banks stabilized stock markets and raised bond yields, putting pressure on non-yielding metals like silver and gold. The pullback was also related to the unwinding of a historic physical silver shortage or “squeeze” in London, which had previously caused sharp price surges.
Remarks from President Donald Trump helped calm trade anxiety, and strong regional U.S. bank earnings boosted bond yields and stock markets, reducing appeal for non-yielding metals such as silver.
Despite the correction, silver’s gains year-to-date remain substantial due to strong industrial demand, ongoing supply deficits, and safe-haven buying. Industrial sectors such as solar panel manufacturing and green energy continue to fuel silver demand amid limited new mine supply and declining above-ground inventories.
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The physical market in London is notably tight, with a severe shortage causing lease rates to spike to unusually high levels (up to 39%), prompting some traders to charter cargo planes to transport silver bars from New York to London. This anomaly is partly due to uncertainties around potential U.S. import tariffs on silver after its recent classification as a critical mineral.The U.S. government’s designation of silver as a critical mineral marks a strategic shift recognizing silver’s dual role as both a precious metal investment and an essential industrial resource. This classification potentially opens the door to increased government stockpiling, funding support for mining and recycling, and trade protections, which could boost future investment and demand for silver.Technical indicators also indicated overbought conditions in silver after a prolonged rally, signaling a likely correction phase. Even with the recent drop, many traders remain bullish on silver over the longer term, especially if the U.S. Federal Reserve pursues more aggressive interest rate cuts, which typically favor precious metals.
Why did silver fall so sharply?
The correction came as fears over U.S. credit risks and U.S.–China trade tensions started to ease, reducing safe-haven demand. Traders who had piled into silver during the recent global uncertainty began locking in profits, triggering a wave of short-term selling.
Analysts at MKS Pamp SA noted that “the London silver shortage is easing from extreme levels,” hinting that some of the earlier supply-driven pressure is now stabilizing.
In technical terms, silver entered overbought territory. The Relative Strength Index (RSI) on COMEX silver futures had climbed above 75, a level often associated with short-term corrections.
How much did ETF holdings and Comex withdrawals change this week
This week saw significant movements in silver ETF holdings and Comex warehouse withdrawals, reflecting intense market dynamics amid silver’s historic rally and correction.
Comex warehouses experienced one of the largest outflows in recent memory, with more than 15 million ounces of silver withdrawn during the week ending October 16, 2025. This marked a continuation of a severe physical shortage impacting the London market, where silver is being physically moved in large volumes to meet delivery demands and arbitrage opportunities between New York and London. Over a recent two-week span, Comex inventories fell by over 20 million ounces, the largest drop in 25 years, intensifying the squeeze in physical silver supply.
On the ETF front, silver ETFs saw a large inflow of nearly 11 million ounces during the same period, driven by both retail investor demand and institutional accumulation. The ETF inflows create additional supply pressure as these funds typically require physical backing, adding to the competition for limited physical silver inventories.
Together, these changes illustrate a market under tight physical supply constraints, where both large withdrawals from Comex warehouses and robust ETF inflows signal strong demand amid volatility. This balance of shrinking physical inventories and growing ETF holdings has contributed to sharp price volatility, including the recent steep correction following all-time highs.
What are the nearest technical support and resistance levels for silver futures
Based on recent market data, the nearest technical support and resistance levels for silver futures are as follows:
- p]:pt-0 [&>p]:mb-2 [&>p]:my-0″>$55.50 – $56.00: Next significant resistance zones identified from broader technical analysis and trader consensus.
The current spot price on the futures market is approximately $50.57, with support expected near $51.00. The resistance at $54.86 is crucial for bulls to regain control. If silver sustains above support and breaks above recent resistance levels, it could signal the continuation of the current bullish trend, while failure to hold support might lead to a deeper correction.
Note that these levels are dynamic and may shift based on market conditions, technical indicators, and geopolitical factors. Always combine support/resistance levels with other technical tools and fundamental analysis for best trading decisions.
Key market data: Silver vs other metals
MetalLatest Price (Oct 19, 2025)Change% ChangeSilver (Spot, NY)$51.88/oz−$3.22−6.2%Gold (Spot, NY)$2,497/oz−$47−1.9%Platinum$995/oz−$16−1.6%Palladium$1,134/oz−$21−1.8%The sharp pullback in silver followed a month-long rally of nearly 24%, driven by industrial demand, supply deficits, and safe-haven inflows.
Analysts say the long-term outlook remains strong
Despite the dip, analysts believe silver’s long-term fundamentals remain bullish.
Demand from the solar energy and electric vehicle sectors continues to rise, and global supply remains constrained.
According to The Silver Institute, total physical demand in 2025 could exceed 1.2 billion ounces, while mine production is expected to remain around 835 million ounces — marking another supply deficit year.
However, experts warn that near-term volatility will stay high.
“Silver tends to move faster and sharper than gold,” said a report by Goldman Sachs, calling the metal a “turbo-charged version of gold.”
What investors should watch next
- U.S. Treasury yields – Rising real yields could pressure silver and gold further.
- Dollar strength – A stronger dollar typically weakens demand for dollar-priced commodities.
- Geopolitical developments – Renewed global tensions or inflation fears could reignite safe-haven buying.
- Industrial demand – Watch data from China and Europe on solar and electronics output.
Short-term traders are advised to stay cautious, while long-term investors may find value in any further dips if industrial demand remains firm.
