5 Reasons Silver Just Shattered Price Records

Silver hit $121 per ounce in late January shattering the record set in 1980. Then it crashed 31% in a single day.

If you're holding silver coins from an inheritance, wondering whether to buy after the crash, or just trying to understand what happened, here's the story in plain English.

As of February 4, silver trades around $88-90 per ounce. Still up 176% from a year ago. And still being driven by five forces that aren't going away.

1. There's Not Enough Silver to Go Around

The world has consumed more silver than miners produced for five straight years. The 2025 shortage alone: 95 million ounces.

Why can't miners just produce more? Because 70% of silver comes as a byproduct when mining copper, zinc, and lead. Unless those metals become more valuable, silver production stays flat even when silver prices spike.

Meanwhile, demand keeps growing. That gap is real.

2. Every Solar Panel and EV Needs Silver

Solar panels consumed 232 million ounces of silver in 2024 nearly four times what they used a decade ago. Each panel needs about 20 grams, and there's no substitute that works as well.

Electric vehicles use 25-50 grams each. Smartphones, computers, AI data centers they all need silver's unique electrical properties.

This isn't investment speculation. It's actual industrial consumption that grows every year.

3. China Controls the Supply Valve

On January 1, China implemented licensing requirements for silver exports. Now every shipment needs government approval.

This matters because China controls 60-70% of globally refined silver not through mining, but through massive refining infrastructure that processes raw material from around the world.

Only 44 companies qualified for export licenses. Silver that used to flow freely to Western markets now faces bureaucratic gatekeeping.

4. Investors Came Back in Force

After ignoring silver for most of the 2010s, institutional money flooded back in 2025. The reason? Inflation fears, concerns about government debt, and a weakening dollar.

Gold gained 65% in 2025. Silver gained 147%.

Indian buyers led the charge as gold became too expensive. German and Australian retail investors followed. Americans joined late but piled in hard as prices accelerated.

5. The Weak Dollar Amplified Everything

The dollar fell 9.5% in 2025 its worst year since 2017. When the dollar weakens, silver becomes cheaper for international buyers. More buyers means higher prices.

Just as supply tightened, industrial demand grew, China restricted exports, and investment money returned the weak dollar added fuel to the fire.

Then Came the Crash

On January 31, silver dropped 31% in one session from $121 to $78. Three things happened at once:

Kevin Warsh's Fed nomination signaled tighter monetary policy. Precious metals hate higher interest rates.

Margin calls crushed leveraged traders. When prices started falling, speculators who'd borrowed money to buy silver got forced out. That selling triggered more selling.

Profit-taking accelerated. Silver had gone from $30 to $121. Traders took their 300% gains and ran.

Here's what's important: the crash was technical, not fundamental. The supply shortage didn't disappear. China didn't reverse export controls. Solar panels still need silver.

What disappeared was the speculative frenzy. From mid-December to mid-January, investors poured nearly $1 billion into silver ETFs the heaviest buying period in history. Chinese citizens lined up to buy bars. Leveraged funds crashed 60% when the correction hit.

The market flushed out the fast money. The structural story remains intact.

What This Means If You're Buying or Selling

If you're thinking about selling silver:

Current prices around $88-90 are still extraordinary by any historical measure. If you bought or inherited silver before 2024, you're sitting on triple-digit gains.

The question isn't whether you have valuable metal. It's whether you sell now or wait to see if prices climb again. That depends on your situation and how much volatility you can handle.

If you're thinking about buying:

The crash created an entry point below the panic highs. But understand that silver can be volatile you just watched it drop 31% in a day.

The long-term case rests on those five forces: supply deficits, industrial growth, Chinese export policy, investment demand, and currency dynamics. If you believe in that story, current levels might be opportunity. If you're uncertain, spreading purchases over time reduces risk.

For everyone:

Work with dealers who provide transparent pricing based on real-time spot prices. Premiums vary by product and market conditions. Get multiple quotes if you're transacting serious money.

At Big Apple Coins on 47th Street in Manhattan's Diamond District, we've seen unprecedented activity this past month both from sellers capitalizing on the rally and buyers entering after the correction. We provide honest appraisals, transparent pricing, and straightforward guidance.

Silver broke a 45-year ceiling in 2025. Even after January's violent correction, the fundamental forces remain in play. Whether those forces push prices higher or the market needs time to consolidate, the best move is understanding what you're buying or selling and working with people who'll give you a fair deal.

** The information and analysis in this article are not to be construed as investment advice.

Big Apple Coins | 4th Floor, 47th Street Diamond District, Manhattan | (212) 398-8166 | Specializing in silver, gold, rare coins, and bullion