Silver investors faced a massive shock on Monday as the white metal witnessed one of its steepest one-day declines in recent months. After hitting record highs, silver prices dropped sharply due to aggressive selling and global market pressure. On the Multi Commodity Exchange (MCX), silver plunged nearly ₹31,000 per kilogram, triggering panic among traders and investors.

Just before the crash, silver had surged to an all-time high of ₹2,54,174 per kg on MCX. However, profit-booking quickly turned the tide as prices tumbled to around ₹2,22,504 per kg within the same session.

This weakness was not limited to the domestic market. Internationally, silver briefly crossed the crucial $80 per ounce mark — the first time ever — but slipped rapidly by the evening. By 9 PM, the price had fallen more than 10% to nearly $71 per ounce, signaling heavy volatility worldwide.

Silver has been one of the best-performing commodities of 2025, soaring nearly 181% since January — far outperforming gold. Several strong fundamentals fueled this rally, including its recognition as a critical mineral in the U.S., supply constraints, rising industrial demand, shrinking inventories, and robust investment interest.

However, after such an extraordinary surge, market correction appeared almost inevitable. Here are the five key factors that triggered Monday’s dramatic slump:

🔍 Why Silver Prices Crashed So Sharply

1️⃣ Profit Booking at Record High Levels

When an asset continuously climbs to record peaks, investors often cash out their profits. Silver’s historic rise tempted traders to exit positions and lock in gains. This led to massive selling pressure and a steep decline within hours.

2️⃣ Weakness in Global Markets

International market volatility played a direct role in India’s price drop. Silver could not sustain above $80 per ounce and quickly retreated. The global downturn immediately spilled over into Indian exchanges, intensifying the sell-off.

3️⃣ Geopolitical Tensions Ease

Silver, like gold, is considered a safe-haven asset. When global tensions rise, investors move toward precious metals. However, recent hopeful developments around the Russia-Ukraine conflict hinted at easing geopolitical risks. As uncertainty reduced, money flowed out of safe assets, dragging silver downward.

4️⃣ Higher Margin Requirements Pressure Traders

The CME Group — which operates major derivatives platforms like COMEX — increased margin requirements on silver futures. Traders now must deploy more capital to maintain positions. This forced many leveraged investors to unwind trades, accelerating the downward spiral.

5️⃣ Technical Correction After Parabolic Rally

Silver had been trading significantly above key technical moving averages — especially the 200-day moving average. When prices stretch too far from fundamentals, even mild triggers can spark heavy corrections. Fear of a market top further fueled panic selling.

📈 Outlook: What’s Next for Silver?

Analysts warn that silver’s explosive rise might have entered the “parabolic stage,” where prices climb too fast, too soon — often followed by sharp reversals. Research firms suggest that although long-term fundamentals remain strong, the recent rally already priced in most positive factors.

Historical patterns also indicate that whenever silver trades excessively above its 200-day moving average, pullbacks tend to be deep and quick. While Monday’s crash may feel alarming, experts believe corrections are a natural part of any bull market and might provide fresh buying opportunities if global demand stays solid.

📝 Bottom Line

Silver’s breathtaking rally finally hit a speed bump. The combination of record highs, global market weakness, and technical pressure triggered a sharp sell-off. Investors are advised to stay cautious, track global cues closely, and seek expert financial advice before taking fresh positions in high-volatility phases.