Why Is Silver Price Dropping After 14.1% Fall, Will It Recover?

Why is silver price dropping sharply after hitting record highs is now the key question for investors. Silver prices fell by 14.1% to around $99.77 after a strong rally earlier this month.

The decline followed heavy profit-taking, a stronger U.S. dollar, and shifting expectations around U.S. monetary policy. Despite the fall, silver remains significantly higher on a monthly basis.

Why Is Silver Price Dropping After Record Highs?

Why is silver price dropping can largely be explained by profit-taking after an aggressive rally. Silver had surged nearly 42% this month before reaching a record high near $121.64.

As prices peaked, many investors chose to lock in gains. This led to a wave of selling across precious metals markets.

Speculative positions had also increased during the rally. When momentum slowed, traders exited quickly, amplifying the decline.

Silver was not alone in this move. Gold, platinum, and palladium also recorded sharp losses after reaching record or multi-year highs.

Gold prices dropped more than 7% in the same period. Platinum and palladium saw even steeper percentage declines.

This broad-based selling created additional pressure on silver. The metal often moves in tandem with gold during periods of heightened volatility.

Dollar Strength and Policy Signals Add Pressure

Another reason why silver price dropping gained speed was the rebound in the U.S. dollar. The dollar strengthened after touching multi-year lows earlier in the week.

A stronger dollar makes dollar-priced metals more expensive for international buyers. This typically reduces demand and weighs on prices.

Markets are also closely watching U.S. monetary policy signals. Attention has increased around upcoming leadership decisions at the U.S. Federal Reserve.

Expectations around tighter balance sheet policies have shifted sentiment. This has reduced near-term appetite for risk across commodities.

When policy uncertainty rises, metals often see short-term volatility. Silver tends to react faster due to its higher speculative participation.

Will Silver Drop Below $99.77 or Rise Again?

Whether silver will drop below $99.77 depends on near-term market stability. This level is now seen as an important technical support zone.

If the dollar continues to strengthen, silver may test lower levels briefly. Additional pressure could also come from continued weakness in gold.

However, a deeper collapse is not guaranteed. Monthly gains remain strong, and long-term demand drivers have not disappeared.

Silver often experiences consolidation after sharp rallies. Periods of cooling are common before prices establish a new trend.

A recovery could emerge if the dollar weakens or if investor demand returns. Broader stability in precious metals would also support silver prices.

What Should Investors Do Now?

Investors watching why is silver price dropping should focus on risk management. Sharp moves in both directions are common after record rallies.

Long-term investors may wait for price consolidation before making new allocations. Entering during high volatility carries elevated risk.

Short-term traders should closely monitor dollar movements and policy signals. These factors are likely to guide silver’s next direction.

Why is silver price dropping reflects a normal correction after extreme gains. Price stability near $99.77 will be key in determining whether silver finds support or extends its decline.