Trading data show silver ran up early on Dec. 27 to a record intraday high of $83.75 per ounce, then quickly unwound to $75.15 in roughly 90 minutes. A 6% jump followed by a 10% slide in such a short window left little time for repositioning, increasing the probability of forced liquidations for leveraged traders and adding pressure for treasuries using silver as a diversification sleeve.
BREAKING: Precious metals fall sharply all around the board, hit new low of day:
1. Gold: -3%
2. Silver: -7%
3. Platinum: -12%
4. Palladium: -15%As we said last night, the rally was getting out of hand.
Expect much more volatility. pic.twitter.com/C3yGln7Slq
— The Kobeissi Letter (@KobeissiLetter) December 29, 2025
Why silver can whip-saw when liquidity thins
Several overlapping drivers help explain the magnitude of the swing. Silver’s profile as a yieldless asset can attract inflows when real yields fall, and those flows can become unstable when positioning builds in a market with thinner liquidity than gold. Industrial demand, especially from the solar sector, tighter inventories, and a comparatively thinner liquidity structure are all cited as factors that can amplify price moves.
Macro expectations added fuel. Shifting assumptions toward less hawkish U.S. monetary policy and the possibility of interest-rate cuts in 2026 encouraged allocations into precious metals, creating inflows that can reverse quickly when depth is limited. In that setup, a strong move higher can become self-reinforcing until the unwind begins. Once selling accelerates, the same thin liquidity can turn a pullback into a cascade.
What the move says about “crypto-style” volatility
The pattern of a sharp run-up followed by a fast reversal mirrors the kind of volatility often associated with cryptocurrencies. Crypto markets frequently see daily 5%–10% moves tied to rapid shifts in sentiment, regulatory headlines, network upgrades, and macro releases such as FOMC decisions and CPI prints. The recent silver episode suggests that when liquidity thins and macro narratives shift, commodities can produce comparable whip-saw price action. Increasing correlation between Bitcoin and equities has also made crypto more sensitive to systemic flows, and silver’s behavior shows how similar flow dynamics can surface in physical markets under stress.
Relative performance between the two assets has shifted in recent months. The Bitcoin-to-silver ratio has fallen to its lowest level since September 2023, signaling short-term silver outperformance versus Bitcoin and highlighting a divergence in investor positioning across safe-haven and speculative allocations.
From an execution standpoint, the episode is a reminder that silver can become a high-risk trading venue when leverage is involved. Leverage and derivatives strategies that assume continuous depth are particularly exposed to sudden air pockets, and the Dec. 27–28 swing underscores the need to treat liquidity as a primary risk variable. For corporate and institutional treasuries, the move highlights sensitivity to rate expectations and the operational need to manage rapid mark-to-market changes. For market makers and exchanges, the spike-and-collapse pattern reinforces the value of calibrated margining and circuit-breaker frameworks in thinner commodity markets.
Silver’s Dec. 27–28 move shows how macro drivers and shallow liquidity can produce crypto-style volatility in a traditional commodity. The core lesson is that “old markets” can behave like “new markets” when liquidity, leverage, and shifting rate expectations collide.