Silver prices plunge 50% as supply lag fuels correction

Silver has lost roughly half of its value over the past five months, dropping from record highs of $108‑$122 per ounce to around $56‑$60. Investor Advait Arora called the decline a "healthy correction" and said the key support level lies near $50‑$55. He remains bullish over the longer term, citing central‑bank reserve diversification, demand from solar power, electric vehicles and limited new mine supply.

Supply constraints are a major factor: about 60‑70% of global silver is a by‑product of gold, copper, zinc and lead mining, so production is driven by demand for those metals rather than the silver price itself. The market has run a deficit for six consecutive years, with inventories down over 760 million ounces since 2021, and opening a new mine can take five to ten years.

In Sweden, investors face a 25% VAT on physical silver, making it significantly more expensive than gold and steering buyers toward tax‑free certificates or mining stocks. The price slide was also amplified by expectations of higher U.S. interest rates, which hurt both gold and silver, while industrial demand remains robust.