Stories
Silver Price Crash: Rs 65.8 Lakh Crore Wiped Out In Minutes Amid US Inflation And China Factor
- •Heavy selling following the US inflation report wiped out about 700 billion dollars from the market value of gold and silver in just 14 minutes.
- •US Consumer Price Index rose 3.7 percent annually, leading to fears that the Federal Reserve might delay cutting interest rates and push bond yields higher.
- •China's solar sector is adopting thrifting and exploring copper substitutes, reducing the industrial demand growth for silver.
- •Record-breaking rallies earlier in the year led to heavy profit-booking and high volatility unseen since 1980.
Key Questions Answered
Heavy selling occurred following the US inflation report released on the night of October 14. The Consumer Price Index (CPI) rose more than expected to 3.7 percent, leading investors to believe the Federal Reserve might delay interest rate cuts and causing the US dollar and bond yields to surge.
Chinese solar companies are grappling with overcapacity and losses, prompting them to adopt thrifting techniques to use less silver per cell or substitute it with cheaper metals like copper. Consequently, the Silver Institute estimates that industrial silver demand could fall by about 2 percent in 2026 to 650 million ounces.
Mean reversion refers to the tendency of prices to drift back toward their long-term average after soaring too high. With silver trading far above its 10-year average—which analyst McGlone places around $31 per ounce—historical cycles indicate that prices can experience sharp corrections following massive speculative booms.
