Silver went through a dramatic swing, moving from record highs to a sharp fall and then bouncing back again. Prices briefly surged to just below $84 an ounce, the highest level ever, before tumbling rapidly. By the time markets steadied, silver had found support near $75 and recovered to trade back above $80. Economist Peter Schiff captured this moment in a post on X.

“It’s been a volatile night so far in the silver market. After surging to a new record high just below $84, silver sold off sharply, finding support just above $75. It has since recovered and is now trading back above $80. This historic bull market still has a long way to run.”

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Schiff’s warning on silver, confidence in gold

Regardless of his long-term optimism on precious metals, Schiff has urged caution when it comes to silver in the near term. He believes prices have run ahead of themselves and need time to cool before becoming a safer entry point again. According to him, silver carries higher short-term risk because of its sharp volatility.

Gold, however, is a different story in his view. Schiff has said gold still looks cheap at current levels and carries far less downside risk compared to silver, making it more suitable for investors right now.

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A rally that has moved too fast

Silver’s sharp rise has been one of the biggest stories in commodities this year. Prices have nearly tripled over the past twelve months, which made silver the strongest performer among precious metals in 2025. The speed of the rally has also made the market fragile.

As reported by Bloomberg, heavy speculative trading, combined with tight physical supply, has caused prices to swing wildly within short periods.

Analysts say enthusiasm has reached extreme levels, with many traders chasing momentum rather than fundamentals.

Why precious metals are surging

The broader rally in precious metals has been driven by a mix of global factors. As reported by Bloomberg, central banks have been buying large quantities of gold, and investors have poured money into exchange-traded funds linked to metals. At the same time, the US Federal Reserve has cut interest rates three times.

Lower rates reduce the appeal of interest-paying assets and tend to boost commodities like gold and silver. Markets are now betting that more rate cuts could follow in 2026, keeping metals attractive.

After hitting fresh records, both gold and silver pulled back as investors locked in gains and geopolitical tensions eased. Gold slipped slightly from its peak and silver fell more sharply after its record-breaking run.

Unlike gold, silver is not just held for safety or investment. It plays a crucial role in modern industries. The metal is widely used in electronics, electric vehicles, batteries, solar panels and medical equipment. With global inventories at very low levels, rising prices are starting to worry industrial users. Prolonged high costs could hurt profitability and push manufacturers to look for alternative materials.

China, India and the supply question

Demand from China and India continues to support silver prices. Both countries use large amounts of silver for industrial production, jewellery and coins. For many families, silver jewellery is still seen as a store of value passed down through generations.

Concerns over supply have grown after reports that China plans to tighten silver export rules from 2026. Since a large share of the world’s silver comes from China, any restriction could further strain global supply. The market is already facing a long-running supply deficit, with demand exceeding production for several years.

Silver’s sudden drop may have shaken investors, but the bigger trend remains intact. Strong demand, tight supply and supportive monetary policy continue to underpin the market.