Silver's astonishing 2025 rally hit a dramatic inflection point Monday as the precious metal staged one of its sharpest single-day reversals in years. After touching a historic high of $81 per ounce in overnight trading—nearly triple its value at the start of the year—silver plunged more than 8% to trade around $72 per ounce by the U.S. market close.

A Rally for the Record Books

Despite Monday's steep decline, silver's 2025 performance remains nothing short of remarkable. The white metal is on track for gains of approximately 166% for the year, having started 2025 trading above just $20 per ounce. This extraordinary run has dwarfed even gold's impressive 70%+ advance, making silver one of the best-performing major assets of the year.

"The shortage is real. Mines have been in deficit for five years, and vaults are running dry. Prices must rise to rebalance supply and demand—though the path higher will inevitably include volatility like we saw today."

— Precious metals analyst

What Drove the Rally

Silver's meteoric rise has been fueled by a confluence of factors that created a near-perfect storm for the metal:

  • Supply constraints: Global silver production has failed to keep pace with demand for five consecutive years, depleting above-ground inventories.
  • Industrial demand surge: Silver's critical role in solar panels, electric vehicle components, and AI hardware has created structural demand that continues to grow.
  • Chinese speculation: Retail and institutional investors in China have piled into silver as an alternative to struggling domestic asset classes.
  • Looming export controls: China, which controls 60% to 70% of global silver output, is set to impose new export restrictions starting January 1, 2026, adding to supply concerns.
  • Monetary policy tailwinds: Central bank rate cuts throughout 2025 have supported precious metals broadly.

Why the Sudden Reversal

Monday's sharp decline appears driven primarily by profit-taking after the psychological breach of $80. When an asset triples in value within a single year, even committed bulls will find reasons to reduce positions. The thin liquidity typical of year-end trading amplified the move.

Technical factors also played a role. Silver had become significantly extended above its moving averages, creating conditions ripe for a pullback. The break below $75 triggered additional selling from momentum-oriented traders.

The Supply Picture Going Forward

The fundamental case for silver remains compelling despite the day's volatility. China's upcoming export controls could remove significant supply from the global market precisely as industrial demand continues to accelerate. The energy transition alone requires vast quantities of silver—each solar panel contains approximately 20 grams of the metal, and global solar capacity additions are accelerating.

Investment Implications

For investors considering silver exposure, Monday's action offers several lessons:

  • Volatility is the price of admission: Precious metals, particularly silver, can move dramatically in both directions. Position sizing should reflect this reality.
  • Pullbacks are normal: Even in powerful bull markets, corrections of 10-20% are common and healthy.
  • Fundamentals matter long-term: The supply-demand imbalance that drove silver higher hasn't changed overnight.

Whether Monday marks a temporary pause or the beginning of a deeper correction, silver's 2025 performance has demonstrated that supply constraints and shifting industrial demand can produce explosive moves in commodity markets—and that those moves can work in both directions.