Silver is recovering from its sharpest intraday reversal since the 2008 financial crisis, rebounding above $110 after plunging more than 7% from Monday’s record high above $117.
The extreme volatility in precious metals reflects a broader crisis of confidence in fiat currencies and government debt. With gold breaching $5,000 and silver posting its wildest swings in 17 years, markets are signaling deep unease over fiscal sustainability in major economies—a sentiment that could ripple across risk assets, including cryptocurrencies.
Record Surge Meets Sharp Reversal
The white metal recorded its biggest intraday jump since the global financial crisis, soaring 14% before giving up most gains in late US trading. After finding support near $103, silver has climbed back above $110, narrowing losses to under 5% as Asian session buyers stepped in.
SponsoredGold also retreated after touching $5,111.07, settling around $5,100.
Debasement Trade Fuels Rally
The precious metals surge reflects growing investor flight from currencies and government bonds amid mounting fiscal concerns. A massive selloff in the Japanese bond market last week underscored rising skepticism toward heavy government spending across advanced economies.
First Eagle Investment Management’s Max Belmont noted that gold historically serves as a barometer of market anxiety, offering protection against inflation surprises, unexpected market downturns, and geopolitical flare-ups.
The dollar index has fallen nearly 2% over six sessions amid speculation that the US may help Japan boost the yen, compounding concerns over Federal Reserve independence and the Trump administration’s policy unpredictability.
Technical Warnings Emerge
Despite the historic gains, major refiner Heraeus Precious Metals has warned that the rally may be overextended, citing technical indicators showing overbought conditions and a compressed gold-silver ratio now at 50, down from 100 a year ago.
J. Safra Sarasin’s Claudio Wewel cautioned that silver typically suffers larger drawdowns than gold after extended rallies due to its higher volatility, suggesting the risk-reward balance could deteriorate if momentum falters.
Key Levels to Watch
Silver’s ability to reclaim $110 will be critical for near-term direction. A recovery toward Monday’s close of $115.50 could establish a V-shaped rebound narrative, while a break below $105 would signal a deeper correction ahead.
Markets now await Trump’s Fed chair nomination and this week’s FOMC decision, with the central bank widely expected to pause its rate-cutting cycle.
