The silver prices have made a dramatic recovery on Tuesday, rising by an estimated seven per cent, following the biggest single-day fall in almost four years, highlighting the increased volatility that has characterized precious metals markets at the end of an extraordinary year.
March futures of silver increased over 7 percent at the outset, rising to approximately 75.50 a pound through the mid-morning in New York. The rebound was a resurgence after a dramatic turnaround on Monday when silver shot as high as an all-time in $80 an ounce but crashed by 8.7% at the close in its worst performance since February 2021.
Silver will be among the most successful commodities of 2025 despite its extreme changes. The annual growth stands at about 158 and is driven by industrial demand, geopolitical uncertainty, concerns about supply, and expectations of an easily implemented monetary policy.
A Record High Followed by a Sudden Reversal
The move of silver to as high as $80 an ounce on Sunday and early Monday was a milestone in the life of the metal that has long been trading in the shadow of gold. But the rally soon became deflated after traders realised they had made money, leading a selling spurt that wiped gains off in hours.
The sudden turn shook the markets, but it made little impact on wider interest in precious metals, which have enjoyed a rare congruence of favourable factors all year round.
Gold also recovered on Tuesday after a sharp pullback itself on Monday. The gold futures contracts traded approximately 1.2 percent up at $4,394 an ounce and copper futures contracts increased nearly 2 percent, reflecting a wider gamut in metals complex.
Industrial Demand Powers Silver’s Rise
Compared to gold, which is mostly held as a store of value, silver bridges the investment and the industrial sector, a factor that has had significant contribution to its substantial returns this year.
Among major consumers of silver, solar panels, electric vehicles, and data centers are the areas that have remained booming. Clean energy projects and artificial intelligence infrastructure demand have given structural support to prices despite fluctuations in financial markets.
Tesla CEO Elon Musk also contributed to the story during the weekend, warning that future export bans on silver in China would disturb global supply. The limits, which will become effective on January 1, caused fears of an increase in restrictions on the availability of manufacturers in the whole world.
“Silver is needed in many industrial processes,” Musk wrote on X, a comment that some analysts believe contributed to renewed buying interest.
Safe Haven Appeal Amid Global Uncertainty
Another important factor that contributed to the high performance of silver was the geopolitical tensions. With increased conflicts and political risks in most parts of the world, investors were turning to precious metals as safe-haven assets.
Meanwhile, inflation issues and a declining American dollar have rendered both silver and gold more desirable to foreign investors. Since commodities are valued in terms of dollars, a greenback that is soft lowers the real price by sending international investors more demand.
Anticipation of the low interest rate in key economies also boosted the prices of metals. Reduced rates will decrease the opportunity cost of non-yielding investments such as silver and gold, which will attract investors to invest more funds in the sector.
Volatility Signals a Turning Point
While silver’s rebound underscores persistent bullish sentiment, some analysts caution that the extreme volatility may signal a transition phase for commodities as markets look ahead to 2026.
Florian Ielpo, head of macro research at Lombard Odier Investment Managers, said that while commodities could remain among the top-performing asset classes next year, leadership may shift away from defensive precious metals.
“With an expected reacceleration of growth in many countries in 2026, precious metals may lose some of their safe-haven appeal,” Ielpo said in an interview with CNBC’s “Squawk Box Europe.” He added that cyclical commodities tied to economic growth could outperform gold and silver in the coming year.
Europe Seen as Potential Bright Spot
Going forward, certain strategists are even hopeful that Europe will do better than the U.S. in early 2026, which may redefine international investment flows. Better growth opportunities, coupled with the relaxation of the financial environment, would shift capital into industrial commodities instead of conventional safe havens.
Nonetheless, the fact that silver can be both an industrial metal and an investment asset can aid its future relevance in the event that the risk appetite surges.
A Roller-Coaster Finish to a Big Year
In the meantime, silver has been prickly to emphasize the speed at which mood changes in markets governed by momentum and speculation. The dramatic movements of the metal in the latter two sessions exemplify why investors in search of late-stage rallies should beware of investing in sectors with good fundamentals.
Yet, despite the turbulence, silver’s performance in 2025 remains extraordinary. Driven by industrial expansion, geopolitical risk, supply concerns, and monetary policy expectations, the metal has cemented its place as one of the standout assets of the year.
As trading activity winds down toward year-end, investors appear to be reassessing how much upside remains — and how much volatility they are willing to tolerate — heading into the next phase of the commodities cycle.