Silver Plunges 53%: What Happened to the Safe Haven?

Silver Drops 53%, Shaking Believers in the Metal

How is it possible that silver, an asset often called an infallible store of value, has lost more than half its price in just five months? The quote went from $120.50 per ounce to $69.20, continuing to fall to around $54-57. Those who bought at the highs look at the chart in disbelief; those who entered at $20 are grinning ear to ear.

Why Has Silver Crashed?

The causes are varied. On one hand, the strength of the dollar, fueled by a Fed keeping interest rates high, has punished all metals. Gold has also fallen, though less severely. On the other hand, there is talk of market manipulation: a Chinese trader allegedly artificially inflated the price with massive purchases that drove the quote up 10-15% daily for weeks, creating a bubble that then burst. Defenders of this theory point out that the drop is merely a return to sensible valuations after a large-scale "pump and dump".

Macro Context Does Not Help

Forecasts from major banks, as always, failed spectacularly. Bank of America predicted silver at $300 by year-end; others said Brent crude would hit $300. The reality: silver at $55 and Brent at $70. Trump's policy, which sought a weak dollar to gain competitiveness, clashes with the greenback's actual strength. The Federal Reserve continues on its path, and markets, like sheep, react to every statement.

Physical Holding vs Paper: Does It Matter?

A recurring argument among physical silver investors is that unless you sell, you haven't lost anything. "I have the same ounces," they say. Others point to the disproportion between paper and physical holdings: it is estimated that there are more than 300 ounces of gold in paper for every real ounce, and something similar may occur with silver. If one day everyone wanted to convert their ETFs into real metal, the price would skyrocket. But meanwhile, volatility rules.

Buy Now or Wait for More Falls?

Opinions are divided. Those who entered at low prices (€18-20) see the drop as an opportunity to accumulate more. Those who think the manipulation hasn't ended expect a floor at $40. But here is a curious data point: despite the crash, silver accumulates a return of +94% over the last year and +148% over five years from those minimum levels. It is not cause for celebration, but nor is it reason to tear your hair out.

An Uncertain Future

As long as the Fed does not change course and the dollar remains strong, silver will have a hard time. Copper, however, is enjoying its moment thanks to the AI fever and electrification. But silver is a finite resource with growing industrial uses (solar panels, electronics). In the long term, fundamentalists believe its time will come. Meanwhile, day traders and those who bought at $100 stare at the screen repeating, "This has to bounce back." Or perhaps not. Market ironies.