Silver Rises Over 1% to $73 After Sharp Correction and Profit-Taking

London | EcoPulse24

Silver prices rose by more than 1% during Tuesday trading, reaching approximately $73 per ounce, as the metal attempted to recover part of its sharp losses from the previous session. On Monday, silver suffered an 8% drop - its largest daily decline in over five years - driven by intense profit-taking after a record-setting rally.

The sharp correction was attributed to both technical and market factors, most notably thin liquidity associated with the holiday season, which exacerbated price swings, and investor repositioning following the recent surge to unprecedented levels.

Despite short-term volatility, safe-haven demand has returned to support prices amid escalating geopolitical tensions. Renewed friction between Russia and Ukraine, along with expanded Chinese military drills around Taiwan, have increased investor interest in defensive assets, with silver seen as a safe haven alongside gold.

Speculative buying in China’s silver market has also contributed to price support, a key factor behind the recent peaks before the correction. This underlines the market’s sensitivity to liquidity flows and shifting risk appetite.

Despite recent fluctuations, silver remains on track for one of its best annual performances since 1979, supported by several structural factors, including three consecutive U.S. Federal Reserve interest rate cuts and robust industrial demand, particularly from the solar energy, electronics, and data center infrastructure sectors.

Analysts note that the current moves represent a natural correction after a strong rally, emphasizing that silver’s overall trend remains supported by solid fundamentals, combining growing industrial demand and its hedging role during periods of global uncertainty.