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Retail investors have piled almost half a billion dollars into bets on silver in the past week even as the metal’s price has cascaded, almost wiping out its extraordinary gains at the start of this year.
As the price plunged, retail investors poured $430mn into SLV, the biggest silver exchange traded fund, in the six trading days to Thursday, according to data analysis by Vanda Research — including more than $100mn on January 30, when the silver price fell 27 per cent, its biggest single-day loss in history.
“People are being attracted by the sex appeal of the thing,” said Rhona O’Connell, an analyst at StoneX. Silver’s appeal had only been boosted by its “monumental sell-off”, she said, which some investors saw as an opportunity to buy at a cheaper price.
Silver fell as low as $64 a troy ounce on Friday — down from a peak of $121 in late January — before rebounding to $78.
“Emotions have been running so high, and that self-fulfilling momentum has [taken over],” O’Connell added. “It’s feeding upon itself.”
Precious metals embarked on record-breaking rallies last year after erratic policymaking by US President Donald Trump — starting with his tariff blitz last April and continuing into this year with crises over Greenland, Iran and the independence of the Federal Reserve — drove investors to what were first seen as “haven” and, increasingly, as speculative assets.
Silver began 2025 at less than $30 a troy ounce and more than quadrupled in price before its recent falls. Gold more than doubled in price from about $2,600 an ounce at the start of 2025 to a peak of almost $5,600 last month. It has since fallen below $5,000.
Both rallies went into reverse on January 30 after Trump chose Kevin Warsh as his nomination to be the next Fed chair — easing concerns that the Fed would bow to the president’s demands to slash interest rates and reducing the appeal of haven assets.
During their breakneck rallies, both precious metals had increasingly caught the attention of speculative and retail traders — particularly silver, which is essentially “a higher [volatility] version of gold”, said Rushabh Amin, a portfolio manager at Allspring Global Investments.
Silver had acquired a “lottery ticket effect”, he added, with its “rolling waves of meme stock-like checks” reverberating as the metal’s volatile swings continued this week.
Silver’s price fell 6 per cent on Monday before rallying 7 per cent on Tuesday, only to tumble almost 20 per cent on Thursday. On Friday, it fell as much as 10 per cent in early trading before rallying to close up 9.5 per cent.
Such violent swings have put off many institutional investors, who must work within risk-control limits and face margin calls — demands for more collateral — when leveraged bets go against them. But retail traders remain largely undeterred.
Data from Vanda Research suggests that many retail investors have cooled on gold, pulling money out of the metal’s biggest ETFs since last week’s peak. In contrast, they have continually delivered net inflows to SLV throughout the slump, not once switching into net selling despite the ETF’s overall steep fall in price.
“That’s why I call it Icarus,” said O’Connell at StoneX, nodding to the character in Greek mythology who fell to his death after flying too close to the sun. “Silver’s flying too much and the rest of us get burnt.”