Silver prices have plummeted below the $50 per ounce mark, erasing nearly a year's worth of gains and leaving investors with significant losses. As of October 31, the spot price of silver dropped to $49.12 per ounce, marking a 6.1% decline from the previous session. This is the lowest price since November 2025. The hardest hit are those who bought at the peak of $121.67 per ounce in late January, now facing losses of nearly 60%. Even investors who entered the market at the beginning of the year, when silver was around $70 per ounce, are down about 30%. Those who accumulated silver since November 2025 have seen their gains wiped out as prices return to their starting point.
The sharp decline in silver prices is attributed to the US Federal Reserve's policy outlook. Although the Fed kept interest rates unchanged at 3.75-4% in its October 28 meeting, two policymakers voted for an immediate rate hike. Fed Chairman Kevin Warsh emphasized that inflation remains high and controlling it will be a gradual process. US GDP grew 3.4% in the third quarter, exceeding forecasts, while core PCE inflation for the third quarter was 2.5%. These factors reinforce the likelihood of further interest rate hikes, keeping the opportunity cost of holding non-yielding precious metals high.
Silver's decline was more pronounced than gold's due to its industrial demand sensitivity. Industrial silver demand reached 657.4 million ounces last year, accounting for 58% of total global consumption. When market worries about a prolonged high-interest rate environment stifle production, silver faces a double blow: losing speculative safe-haven funds and risking a decline in industrial orders. Nirpendra Yadav, a senior analyst at Bonanza Portfolio, described the break below $50 per ounce as a major blow to investor sentiment, triggering profit-taking and stop-loss orders.
Experts advise caution before rushing to buy at the bottom. The $50 per ounce mark, once a strong psychological support, has become a difficult resistance level to overcome. The short-term resistance zone is around $52.24 per ounce, and prices could fall further if they do not regain the $50 mark soon. Nirpendra Yadav recommends monitoring signs of price stabilization and a return of demand before opening new buy positions.