Silver prices are likely to drop due to a large amount of silver entering London vaults and a decrease in demand from India. This shift could bring silver prices down to about $40 per ounce. The recent increase in silver supply is the biggest we’ve seen since tracking began. The Reserve Bank of India’s actions have reduced demand, making high silver prices less necessary. It seems unlikely that silver will reach a price of $50 per ounce. Current market conditions may lead to significant selling from speculators. When speculation decreases, silver prices could decline further. The FXStreet Insights Team collects data from commercial sources and experts to provide detailed insights on market trends. Silver markets are starting to stabilize after the largest influx of metal into London vaults on record. Recent data from the London Bullion Market Association (LBMA) indicates that stocks are at their highest since the supply issues of the early 2020s. This means prices no longer need to be high to encourage supply from unusual sources. Meanwhile, demand from India is decreasing significantly after the Reserve Bank of India’s stricter financing for bullion imports in August. Preliminary data for September 2025 shows almost a 40% drop in silver imports compared to the record levels earlier this year. This reduction weakens a crucial support pillar for the market. The failure to break the important $50 per ounce level earlier in October is a bearish signal. Last week’s CFTC report revealed that managed money positions are extremely net-long, indicating the market might be overcrowded and nearing a sell-off. This could lead to a rapid price drop. This situation is similar to the peak in 2011, when speculative excitement also fell short of $50 per ounce. That time, there was a drawn-out correction as speculative positions unwound over several months. The current situation suggests that a downward trend is likely. Given this outlook, traders may want to prepare for a move toward the $40 per ounce mark in the upcoming weeks. Strategies that benefit from falling prices or increased volatility could work well. Establishing bearish positions—like buying puts or selling futures contracts that expire in December 2025 or January 2026—would align with the view that the recent speculation is reaching its peak.

here to set up a live account on VT Markets now