Silver prices delivered one of their sharpest and most volatile moves in recent history on December 29, prompting Nithin Kamath, co-founder and chief executive officer of Zerodha, to caution that while such swings may appear ideal for traders, they can quickly turn into a nightmare.
Silver prices gyrated sharply on Monday. The white metal plunged after hitting record highs earlier in the day — recording its wildest swing in almost five years, as per a Reuters report.
Referring to the MCX Silver futures chart, Kamath highlighted both the allure and the danger of extreme price action.
"This type of move is what every trader dreams of capturing, but it can also be a nightmare to manage without a good understanding of how to size your positions. Especially when something moves ~10% intraday. On a side note, there seems to be a sharp increase in commodity trading volumes," he said in a post on X.
Kamath’s remarks serve as a cautionary reminder for traders drawn to highly-volatile assets like silver. While rapid price moves can generate outsized gains, they also demand disciplined risk management.
Kamath has always stressed the importance of sizing, an often overlooked aspect by retail investors, which can prove to be fatal. “You can be right on direction 60% of the time and still lose everything if you size your positions poorly,” he said recently.
Historically, silver has been a challenging asset for traders. It is known for sudden spikes, deep pullbacks, and volatile price action, often reacting sharply to global cues such as currency movements, interest rate expectations, and shifts in industrial demand. Unlike equities, where circuit limits and broader market participation can sometimes temper moves, commodity futures can amplify gains — and losses — through leverage.
Silver’s recent spike has coincided with a visible rise in commodity trading volumes in India, suggesting renewed participation from retail as well as active traders.
Kamath observed that there appears to be a sharp increase in commodity volumes, a trend that often accompanies periods of heightened volatility and strong directional moves.
Silver’s surge
Silver has been among the standout performers across global commodities, surging sharply over the past year amid strong industrial demand, geopolitical uncertainty, and speculative interest. The recent rally pushed prices past key psychological levels, accompanied by intense volatility.
The while metal traded near $73 an ounce on Tuesday after tumbling 9%, the biggest intra-day drop in five years. Silver prices rebounded as bargain hunting emerged following a violent profit-booking-driven selloff yesterday.
Silver has delivered one of the most exemplary rallies seen in 2025, emerging as a best-performing asset this year, supported by central-bank buying, ETF inflows and three US Federal Reserve rate cuts.
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