Why is silver price down by 31% and will it slump below $79 or make a comeback? Silver fall explained. Here's what should investors do now

Why is silver price down by 31% and will it slump below $79 or make a comeback? Silver prices fell sharply by more than 31% on Friday, following a broader sell-off in precious metals. The decline came after President Donald Trump nominated Kevin Warsh as the next Federal Reserve chair, easing concerns about central bank independence and boosting the US dollar. Gold also dropped over 12 percent, influencing silver’s fall. Investors reacted to the shift in market conditions, selling metals and reducing risk exposure. Analysts warn that silver may continue to face pressure if the dollar remains strong, but prices could rebound if geopolitical tensions rise or economic uncertainty returns.

Why is silver price down by 31% and will it slump below $79 or make a comeback?

Silver prices dropped more than 31% recently. The fall followed a rise in the US dollar and a sell-off in gold. Investor confidence increased after Kevin Warsh was nominated as Federal Reserve chair. Silver may fall further if the dollar strengthens, or it could recover if global risks rise again.

Why is silver price down by 31%?

Silver is down due to several factors. A stronger US dollar reduces demand for silver. Gold’s steep decline also affected silver prices. Market concerns over Federal Reserve independence eased after the nomination of Kevin Warsh, which led to the sell-off in precious metals.

Will silver slump below $79 or make a comeback?

Analysts say silver could fall below $79 if the US dollar remains strong and global uncertainty decreases. However, renewed geopolitical tensions, inflation concerns, or weaker economic data may support a rebound, helping silver recover from current lows. Prices are volatile and depend on multiple global factors.

However, silver prices remain higher than levels seen a year ago. A return of geopolitical tension or weaker economic data could support a rebound.

Gold and silver witness one of the steepest daily drops ever

Silver prices dropped sharply on Friday as a broad sell-off hit precious metals. The fall followed news that President Donald Trump nominated Kevin Warsh to lead the US Federal Reserve. The move supported the US dollar and reduced market concerns about central bank independence.

Near 1830 GMT, silver prices fell more than 31 percent to $79.30 per ounce. Gold also declined by over 12 percent to $4,724.80 per ounce. The fall marked one of the steepest daily drops for both metals.

Dollar strength triggers silver sell-off

One key reason is the stronger US dollar. The dollar gained after Kevin Warsh was named as the next Federal Reserve chair when Jerome Powell’s term ends in May.

A stronger dollar often pressures silver prices. Silver is priced in dollars, so higher dollar value reduces demand. Investors also shifted away from safe assets as fears around Federal Reserve independence eased.

Gold decline adds pressure on silver

Silver prices often follow gold trends. Gold prices had reached record levels earlier in the week. Spot gold rose close to $5,600 per ounce due to global uncertainty. However, prices reversed sharply on Friday.

Citi said that the nomination of Kevin Warsh supports its view that the Federal Reserve will remain independent. The bank called this a medium-term bearish factor for gold. This view also affected silver sentiment.

Risk factors supporting metals may fade

Citi stated that gold demand remains supported by several risks. These include US-China tensions, China-Taiwan concerns, US government debt issues, and uncertainty around artificial intelligence.

However, Citi estimates that about half of these risks may fade later in 2026. The bank also expects easing tensions related to Russia-Ukraine and Iran. These developments could reduce safe-haven demand for gold and silver.

Investor behavior shifts after price swings

The sharp fall caused increased activity among metal traders. Some investors sold silver and gold to lock in gains. Others waited as volatility increased.

Across global markets, consumers continued buying and selling precious metals. Jewelry sellers and dealers reported steady activity. Higher prices earlier in the year encouraged many holders to sell.

What should investors do now?

Investors should consider their goals and risk tolerance. Those holding silver can wait for stability or potential recovery. New buyers should evaluate long-term plans, avoid short-term speculation, and monitor dollar trends and geopolitical risks before making decisions.

FAQs

Why is silver price down by 31% and will it slump below $79 or make a comeback?
Silver fell due to a stronger dollar, gold sell-off, and easing concerns about Federal Reserve independence after Kevin Warsh’s nomination as Fed chair.

How did Kevin Warsh’s nomination affect silver prices?
Kevin Warsh’s nomination as Federal Reserve chair strengthened the US dollar and eased concerns about Fed independence. This reduced demand for safe-haven assets like silver, contributing to its sharp price decline.