Insights 
VT 
Silver prices are expected to decrease due to excessive free-floating silver entering London vaults and cooling demand from India. This change might push silver prices back to around $40 per ounce.
The influx of silver has been the largest recorded since this data collection began. The Reserve Bank of India’s intervention has contributed to reduced demand in India, lowering the necessity for high silver prices.
Achieving a spot price of $50 per ounce is unlikely, as the current market conditions may result in significant outflows from speculators. Speculative activity could see a decrease, leading to a potential decline in silver trading prices.
Market observations are compiled from both commercial and expert analysts by the FXStreet Insights Team, ensuring detailed insight into recent market trends.
We are seeing silver markets normalize after the largest influx of metal into London vaults since records began. The latest London Bullion Market Association (LBMA) data from early this month confirms stocks have swelled to their highest level since before the supply squeezes of the early 2020s. This suggests prices no longer need a premium to incentivize supply from unconventional sources.
At the same time, Indian demand is cooling significantly following the Reserve Bank of India’s recent tightening of bullion import financing in August. Preliminary trade data for September 2025 shows a near 40% drop in silver imports compared to the record-setting pace we saw earlier in the year. This key pillar of support for the market is now weakening.
The failure to decisively break the critical $50/oz psychological level earlier in October is a major bearish signal for us. Last week’s CFTC report showed managed money positions at extreme net-long levels, suggesting the trade is overcrowded and ripe for a long liquidation event. This creates an environment where a sharp unwind could drive prices down quickly.
From our perspective, this price action is highly reminiscent of the 2011 peak, another period of speculative mania that failed right below $50/oz. That event was followed by a prolonged correction as speculative positions were unwound over many months. The current setup suggests a similar path of least resistance is now to the downside.
Given this outlook, traders might consider positioning for a move back towards the $40/oz level in the coming weeks. Strategies that benefit from either a drop in price or an increase in volatility could prove effective. Establishing bearish positions, such as buying puts or selling futures contracts with expirations in December 2025 or January 2026, would align with the view that the recent speculative fervor is climaxing.
