While gold dropped by R330 to R26,370 per 10 grams, matching its price on August 10, 2011, silver prices plunged by R1,530 to R42,170 per kg, a level last seen on November 26, 2010.
Selling pressure gathered momentum with precious metals in global markets extending their longest slump in four years as investment holdings contracted, stocks rallied and the dollar surged against other currencies.
In global markets, which normally set the price trend on the domestic front, silver tumbled 7% to $20.69 an ounce and gold fell 1.5% to $1,338.85 an ounce.
A weak trend at futures trade, as speculators offloaded their positions to shift their funds to rising equities, further fuelled the sentiment, traders said.
Besides, the fall in demand due to the off-wedding season and customers expectations of a greater correction in bullion prices were other dampening factors, they added.
On the domestic front, silver ready dropped by R1,530 to R42,170 per kg and weekly-based delivery by R1,485 to R41,170 per kg. Silver coins nosedived by R3,000 to R72,000 for buying and R73,000 for selling of 100 pieces.
Similarly, gold of 99.9% and 99.5% purity tumbled by R330 each to R26,370 and R26,170 per 10 grams, respectively. Sovereigns, too, plunged by R200 to R23,500 per piece of eight grams.
Investors have been dumping gold and silver, which are down 20% and 30%, respectively, this year while stocks and the dollar have risen on an improving global economic outlook.
Gold-backed exchange-traded funds have seen massive outflows in recent months, although silver holdings have held up well.
Analysts had said it was only a matter of time before silver would give way given flagging industrial demand.
More than 3,000 lots were sold in Comex silver futures in just 20 minutes of early Asian trading on Monday, data showed.
Yuichi Ikemizu, branch manager for Standard Bank in Tokyo said an unidentified investor sold off a big chunk of silver holdings on Monday morning.
The drastic move happened pretty much after the Chicago Mercantile Exchange's (CME) electronic platform Globex opening, MKS head of trading Afshin Nabavi said.
The move was exacerbated by the fact that it happened when liquidity was very thin in Asian trade," he added. If the same happened in London or New York hours, the size of the liquidation might have been cushioned by higher volumes.
The gold-silver ratio is at its highest level since September 2010 with an ounce of gold currently buying 63 ounces of silver. That is twice as much as in April 2011, when silver was trading considerably higher. Holdings of the worlds largest silver ETF, the iShares Silver Trust , fell 187.7 tonne last week to 10,253 tonne, hitting their lowest level since mid-January. That was the trust's biggest weekly outflow since the start of May.
Comments from Federal Reserve officials and positive US data have boosted talk that the bank may reduce its monetary easing measures, which have boosted gold prices in recent years, by holding down interest rates and undermining the dollar.
The downward pressure on gold continues and we are now back to levels post the mid-April sell-off, UBS said in a note.
* Analysts had said it was only a matter of time before silver would give way given flagging industrial demand
* The gold-silver ratio is at its highest level since September 2010 with an ounce of gold currently buying 63 ounces of silver. That is twice as much as in April 2011, when silver was trading considerably higher
* Gold-backed exchange-traded funds have seen massive outflows in recent months, although silver holdings have held up well