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

Summary

On December 29, 2025, the silver market witnessed a dramatic day. Driven by a surge in Chinese investment demand (with Shanghai premiums hitting record highs) and concerns over global supply shortages, spot silver prices soared to a historic peak of $83.63 per ounce during early Asian trading hours. At this pinnacle, silver's total market capitalization briefly surpassed that of the AI giant NVIDIA, capturing the global spotlight.

However, the extreme gains immediately triggered large-scale profit-taking, causing silver prices to crash by nearly 10% and retreat to the low $70s—marking the largest single-day decline since 2021. Despite this volatility, silver remained one of the top-performing assets of 2025, with a year-to-date gain of 148%, far outperforming most mainstream assets. Gold followed a similar pattern, pulling back after hitting its own record of $4,543 per ounce.

Commentary

This rally is not only a victory for precious metals but also a microcosm of broader market sentiment. Silver’s market cap briefly overtaking NVIDIA symbolizes a capital rotation from "virtual AI premiums" toward "physical scarcity." When industrial demand overlaps with safe-haven attributes, traditional metals can exhibit explosive growth rivaling high-tech stocks. This also serves as a testament to the ongoing upward trajectory of the global economy.

Technical Warnings: The 14-day Relative Strength Index (RSI) has remained above 70 for an extended period, indicating an extremely overbought market. The 10% single-day drop is a classic high-leverage shakeout, reflecting silver's higher and more dangerous volatility compared to gold.

Structural Support: Despite the short-term technical collapse, the fundamental drivers—including the Federal Reserve's rate-cut cycle, the squeeze on London inventories, and robust physical demand from China—remain intact. As long as structural deficits persist, the metal is expected to stay on a long-term upward trajectory in 2026.

Conclusion:

Current silver price action behaves more like a high-risk growth stock rather than a traditional stable safe-haven asset. For investors, enjoying these staggering gains requires the psychological resilience to endure intense market turbulence.