.Historic Peak and Sharp Correction Silver prices surged to a new historical high, reaching over $121 per ounce. However, it then plunged significantly, with some reports indicating a drop of nearly 40% from its peak in a single day, settling around $74-$85. Other sources mention a 31% drop in one day or a 37% drop.
Briefly Outshining Tech Giants Before its sharp decline, silver's market capitalization had soared, briefly surpassing major tech companies like Nvidia, and even Apple, to become the world's second or third largest asset after gold. This was a significant shift, highlighting a growing interest in tangible assets.
Driving Factors Several factors contributed to this volatility, including:
Industrial Demand: Explosive growth in industrial applications, particularly from green energy (solar panels, electric vehicles) and semiconductors.
Supply Constraints: Persistent supply deficits and issues like China's export restrictions.
Monetary Factors & Geopolitical Tensions: Central bank policies, concerns about inflation, and global uncertainties encouraged investors to seek safe-haven assets.
$PAXG Technical Momentum: Silver broke through long-standing resistance levels, attracting algorithmic and momentum traders.
The Crash Trigger The sharp drop appears to have been triggered by news of President Trump's nomination of Kevin Warsh as the next Federal Reserve Chair. Warsh, known for a hawkish stance on inflation, reportedly caused a strengthening of the US dollar and rising real yields, leading to the liquidation of leveraged positions in precious metals.
Outlook: Despite the sharp correction, many analysts suggest that the structural drivers for silver's long-term gains remain intact, though near-term volatility is expected. Some view the dip as a "healthy correction" and a potential buying opportunity for patient investors.
It really goes to show how quickly things can change in the markets! Let me know if you want to dive deeper into any of these points.$XAG
#GOLD #SILVER #XAG #PAX