SILVER TUESDAY: THE DAY THE WHITE METAL LOST ITS SHINE

November 5, 2025

Parneet Sachdev 

It began like any other Tuesday, with dealers assuming that the white metal might tack on a little more after its blistering run. Only days earlier, on 15 October 2025, Indian futures on the Multi Commodity Exchange had set a fresh all-time high near Rs 1,90,000/kg amid festival-season demand, while the global spot market had vaulted to a record around $53/oz the prior week as London supplies tightened(TOI).

By the afternoon of 21 October, the mood flipped. A firmer dollar and hawkish rates repricing catalysed profit-taking; spot silver dropped roughly 7–8% on the day to about $48.3– $48.5/oz, its sharpest single-session fall in years, and Indian prices reset markedly lower in ensuing sessions toward Rs 1.48–1.50 lakh/kg as volatility spilled over(Reuters).

The wealth destruction was immediate and measurable. Using end September London vault holdings of 24,581 tonnes (valued then at about $36.5 billion), a 7% markto-market swing implies roughly $2.5 billion of value erased in vaulted silver alone that day; U.S. investors in the iShares Silver Trust (SLV), which held about $27.4 billion of assets before the break, saw on the order of $1.9 billion vaporise (LBMA). In trading rooms from Mumbai to London, the date acquired a name of its own: Silver Tuesday.

 T H E R E C E N T C R A S H E S – S I L V E R

THURSDAY Silver h a s moved uneasily for much of modern financial history, alternating between a quasi-monetary role and an industrial input whose price is tethered as much to factories and solar farms as to central banks and ETFs. In the late 1970s it famously became the object of an attempted corner by the Hunt brothers, who accumulated more than 100 million ounces. When margin requirements rose and financing cracked, “Silver Thursday” in March 1980 saw prices collapse from peaks near $49.95 per ounce earlier that year—an episode that still anchors the cautionary mythology of this market (World Gold Council/LBMA histories; contemporaneous reconstructions).

The next great crest came in April 2011, when silver again neared $48.70/oz amid post-crisis quantitative easing and retail ETF adoption, before another long retreat(Investing news).This alternation between monetary fervour and industrial reality is the thread that explains both the past two years’ meteoric rise and the abrupt plunge of the last few days.

DID THE LATEST PRICE BOOM SIMPLY MIRROR EV AND SOLAR DEMAND?

The Silver Institute’s World Silver Survey reports that more than half of global silver offtake is industrial, w i t h p h o t o v o l t a i c s , electronics and automotive s y s t e m s i n c re a s i n gl y important. Battery-electric vehicles typically contain on the order of 25–50 grams of silver per car for power electronics and highreliability contacts.

The latest Survey (April 2025) still shows a tight market: supply rising modestly, demand easing slightly from 2024’s highs, yet the balance remaining constrained because most silver is mined as a by-product of lead, zinc, copper and gold, so higher prices do not quickly induce new primary supply(world silver survey). Correlation with EV demand is present but imperfect.

On the one hand, the slope in 2024–25 clearly coincided with the “electrification bid”: Reuters, for example, noted in June 2025 that silver had surpassed $35/ oz for the first time in thirteen years on a blend of industrial and financial drivers, with analysts emphasising multi-year deficits linked to energytransition demand.

On the other hand, year-to-year price movements remain more tightly correlated with gold and global liquidity conditions than with any single industrial series; StoneX/Nasdaq data put silver’s correlation with gold at ~0.80 in 2024 versus ~0.55 with copper, underscoring the dual identity of the metal as both industry feedstock and “high beta” monetary proxy. In short, growing EV and PV demand created a fundamental floor and occasional scarcity premia; however, that doesn’t explain everything. The dramatic leg-higher in 2025 required the financial accelerant of investors, ETFs, and a physically tight London market.

Bloomberg and the Financial Times reported in mid-October that spot silver spiked to fresh records around $53/oz amid reported scarcity in London. That scarcity, plus brisk ETF inflows—roughly $2 billion into US silver ETFs yearto-date with SLV holdings rising—added torque to a market whose free float is small relative to the size of global macro capital (Financial Times).In other words, it wasn’t just the EVs wanting more silver. It was the people, the retail and nonretail investor who dumped all they had in silver! ARE THERE SILVER CARTELS? History offers both caution and context. There is no credible evidence of a contemporary “silver cartel” engineering the 2024 –25 upswing.The market structure—OTC flows centred in London, futures liquidity on COMEX/ MCX, and large visible ETF positions—makes a durable, coordinated cartel implausible. There have, however, been proven manipulation cases at the level of trading desks. JPMorgan entered into a $920 million deferred prosecution agreement with the U.S. Department of Justice in 2020 over spoofing schemes in precious metals futures; former traders were later convicted, and the case remains the canonical modern example of illegal order-book tactics in this market(US Deptt of Justice). Those episodes speak to episodic abuse of microstructure rather than to a long-lived cartel dictating the multi-quarter price path. The weight of the evidence for 2024–25 points instead to fundamentals (multi-year deficits), investor flows, and a shrinking, segmented physical pool that amplified moves.

WHY, THEN, DID SILVER PLUNGE IN THE LAST FEW DAYS?

After sprinting to records in mid-October, both gold and silver suffered their sharpest one-day declines in years on 21 October 2025 as the U.S. dollar strengthened, markets pushed out Federal Reserve easing expectations, and profit-taking cascaded through momentum-driven positioning. Newswires and market commentary reported intraday silver drops of 8–9%, with spot probing the high- $40s (reuters). At the same time, exchanges and brokers increased performance-bond (margin) requirements in response to surging realised volatility.

India’s MCX introduced additional margins on silver contracts from 17 October, likewise tightening leverage in a market where India is a major physical buyer(Angel One).In physically tight conditions, a crowded, volatile trade had to correct- and it did so rather violently. T h e q u e s t i o n o f “margins becoming so high” for suppliers touches two distinct ideas that converged in October. First, futures margins for traders rose as noted above, increasing the cost of carrying risk(Reuters).

Second, physical premia— the extra dollars over benchmark prices that refiners and wholesalers charge—had expanded because vault stocks were thin and logistics were stretched; the FT reported $1–$2/oz premia in London over COMEX at the height of the squeeze, unusual for silver and indicative of tight near-term deliverable supply. In India, such premia exceeded Rs 40000/- per kg.

 WHAT DOES THE FUTURE HOLD

A balanced view is that silver retains a compelling fundamental tailwind. On the demand side, PV installations continue to absorb large volumes; the Silver Institute has documented five straight years of structural market deficits driven by energyt r a n s i t i o n d e m a n d , electronics and autos. While 2025 may see some easing, the medium-term path still points to high industrial pull. On the supply side, the by-product nature of most mine output slows the feedback loop from price to production. Inventories in London are lower than in recent years, shrinking t h e c u s h i o n aga i n s t shocks(LBMA). Financially, silver will continue to trade as a high-beta cousin of gold. When real yields fall and the dollar softens, silver tends to outperform; when policy rates stay higher for longer or growth falters, the industrial link can pull the other way.