Silver plunged as much as 16.6% in Asian trading because a fragile market mood, thin liquidity, and a sharp reversal of speculative positioning triggered a rapid sell-off across precious metals. The decline comes right after a historic crash late last week and is being worsened by uncertainty around US monetary policy, especially after Kevin Warsh was nominated as the next Federal Reserve Chair. Investors are also pulling money out of exchange-traded products (ETPs/ETFs), amplifying the downside.

What Exactly Happened to Silver Prices?

Silver prices dropped sharply on Thursday:

Spot silver fell as much as 16.6%
It briefly climbed above $90/oz early in Asia before collapsing
By 11:18 am Singapore time, silver traded around $76.95/oz (down ~12.7%)
Gold also fell, dropping as much as 3.5%, and later trading near $4,859/oz

This erased all gains from the previous two sessions and extended the post-crash damage.

What’s Dragging Silver Down? (Main Reasons)

1) Fragile Sentiment + Thin Liquidity = Bigger Falls

Analysts say the market mood has turned negative across assets.

Christopher Wong of Oversea-Chinese Banking Corp Ltd (OCBC) noted that sentiment has become “soggy” across equities and metals, and that thin liquidity triggered a feedback loop — meaning selling created more selling.

In simple terms: fewer buyers + panic selling = exaggerated price drops.

2) The Rally Was Speculative — and It Unwound Fast

Silver had rallied strongly last month due to:

Speculative buying
Geopolitical tensions
Concerns about US Federal Reserve independence

But that rally ended abruptly, and silver suffered its biggest ever one-day fall on Friday.

When markets are driven by speculation instead of long-term fundamentals, reversals can be brutal.

3) US Fed Leadership Uncertainty Is Spooking Markets

A major trigger now is uncertainty about US monetary policy.

Markets are focused on the outlook after:

Kevin Warsh was nominated as the next Federal Reserve Chair
US President Donald Trump said he wouldn’t have chosen Warsh if he supported rate hikes
Trump also said there’s “not much” doubt the Fed will cut rates again

Rate cuts typically support precious metals, but right now the uncertainty is creating chaos — not confidence.

4) Investors Are Exiting Metal Funds (ETPs/ETFs)

According to Standard Chartered Plc analysts, part of the volatility is being driven by:

Investors pulling money out of exchange-traded products

ETP outflows force selling in the underlying metal, accelerating declines.

However, they also said structural drivers remain intact, and they still expect a longer-term rebuild upward.

Why Gold Also Fell (Even Though Rate Cuts Help Metals)

Normally, gold and silver benefit when interest rates fall because they don’t pay interest.

But in panic conditions, metals often fall because:

traders sell to raise cash
margin calls force liquidation
volatility kills risk appetite

So even “safe havens” can drop hard during market shocks.

Key Entities

Silver (Spot Silver) — Global precious metal benchmark
Gold (Spot Gold) — Global precious metal benchmark
Federal Reserve (US Central Bank) — US monetary policy authority
Kevin Warsh — Nominee for Chair of the Federal Reserve
Donald Trump — President of the United States
Oversea-Chinese Banking Corp Ltd (OCBC) — Singapore-based bank and market strategist source
Standard Chartered Plc — Global bank providing commodity outlook
Bloomberg Dollar Spot Index — US dollar strength indicator

Final Verdict

Silver is plunging not because the long-term story is dead, but because the market is trapped in a high-volatility unwind after a speculative rally collapsed. Thin liquidity, policy uncertainty around the Fed, and heavy selling from ETP/ETF investors are intensifying the fall. Until markets regain confidence about US interest-rate direction, silver is likely to remain wildly unstable, with sharp drops and sudden rebounds still on the table.