Global financial markets, specifically the precious metals sector, witnessed a violent price earthquake during trading today (Friday), as silver prices heavy and unprecedented losses, recording a remarkable decline that was classified as one of the most violent daily downward waves in the history of trading this metal.
The price collapse in numbers
According to official trading data, the price of an ounce of silver closed yesterday (Thursday) at record levels of $115.392 , which is equivalent to approximately 13,912 Saudi Riyals per kilogram, suggesting relative stability at high levels.
However, the picture took a dramatic turn at the start of trading today, as prices continued their sharp decline without pause, plummeting to $73.474 per ounce, equivalent to 8,858 riyals per kilogram. Based on this percentage change, silver has recorded a catastrophic drop of 36.33% , losing approximately $41.92 per ounce in just one trading session.
Losses in local currency and their impact
According to precise calculations in Saudi Riyals, a kilogram of silver lost 5,054 Riyals within 24 hours, a figure that clearly reflects the extreme volatility currently plaguing the metals market. This dramatic drop presents traders, especially short-term speculators, with significant financial challenges and risks.
Market context and the volatile nature of silver
It is well-established in economics that silver exhibits significantly higher price volatility than gold. This is due to its smaller market size compared to the yellow metal, as well as its dual role as both an investment metal and an industrial metal used in numerous technological and medical applications. Historically, silver has experienced sharp price movements in response to global economic variables, such as interest rate changes, the strength of the US dollar, or significant profit-taking following strong upward price movements.
Risks and lessons learned
This event highlights the importance of risk management in investment portfolios. While precious metals are often considered a "safe haven" against inflation, this collapse confirms that they are not immune to sharp corrections. This downturn serves as a harsh lesson for investors about the risks of margin trading and over-reliance on short-term speculation in commodity markets, where prices can erase months of gains in a matter of hours.
