Silver Plunges 9% in Biggest 5-Year Drop; Profit-Taking Blamed, Long-Term Outlook Strong

• Silver prices experienced their largest single-day drop in over five years, falling 9% before stabilizing above $71 per ounce.
• The sharp decline is attributed to significant profit-taking by traders and investors after a strong year-end rally, exacerbated by low market liquidity.
• Gold also saw pressure with a 4.4% drop but less severe, indicating simultaneous profit-taking in both precious metals.
• Despite the recent fall, both gold and silver are on track for their best annual performance since 1979, driven by central bank purchases and ETF inflows.
• Lower US interest rates, with three consecutive cuts by the Federal Reserve, make non-yielding assets like gold and silver more attractive to investors.

Why It Matters: Recent silver price drop is profit-taking, not panic; long-term outlook remains strong despite volatility.