Silver, a roughly $5 trillion market, has been one of the standout performers over the past year. Prices surged amid geopolitical tensions, economic uncertainty, and a weakening U.S. dollar. That backdrop makes the recent price action all the more jarring: how can the world’s second-largest precious metal suddenly fluctuate like a small cap meme stock?
The answer came fast. A more than 30% single-day selloff dragged silverl into a bear market for the first time since 2022. The trigger was a sharp shift in macro sentiment after President Trump nominated Kevin Warsh to chair the Federal Reserve. The announcement sparked a dollar rally, adding immediate pressure to precious metals, and prompting many investors to lock in profits.
Warsh, viewed as one of the more establishment-friendly candidates under consideration, helped ease concerns that a Trump loyalist might compromise the Fed’s independence. Trump has spent the past year pressuring the Fed to aggressively lower interest rates despite elevated inflation and tariff uncertainty. Warsh’s nomination reassured investors that U.S. monetary policy credibility would remain intact — at least for now.
Markets reacted swiftly. Silver (XAGUSD) sank as much as 18% in the early hours Thursday, with spot prices sliding toward the high $70s per ounce and futures following closely behind. Days of gains were erased in hours, sending short-term volatility to levels rarely seen in major commodities.
The violence of the move is hard to ignore, especially after silver rallied roughly 150% in 2025. Swings of this magnitude are far more typical of thinly traded equities than of one of the world’s largest commodity markets.
As a result, comparisons to meme stocks like GameStop are growing louder. Momentum traders, rather than fundamentals, appear to be setting the pace. Gold (XAUUSD) also whipsawed, dropping more than 4% before stabilizing near $5,000, but silver’s smaller and more speculative market amplified the damage.
So what’s the takeaway? When leverage and hype dominate, even the biggest markets can start behaving like small caps. Speculation has driven much of the recent price action, with fast money entering quickly and exiting even faster. In that environment, buyer discipline suddenly matters a lot.
Bottom line for traders: the recovery may be real, but volatility is the price of admission.
