Dealers insist that at least 20 million ounces were involved, with some arguing that nearer 40 million ounces, worth around pounds 80m, changed hands, raising the possibility that more than one large seller was involved.
The NCB, one of the bigger players in the bullion market, said it had sold the silver on behalf of big Saudi clients. It would not identify them, although the bank is known to have close ties to members of Saudi royal family.
In London, the price bounced slightly yesterday, with silver fixed at dollars 3.90 an ounce in the afternoon, slightly up on its previous close of dollars 3.88. At one point on Tuesday it fell to dollars 3.82, its lowest point this year.
But the slight rally was described as whistling in the dark by one dealer.
'There is a lot of silver sloshing around looking for a long-term home as a result of the Saudi sale,' he said. 'If on top of that there is more Middle East selling to come, we are looking at a bottomless pit.'
The motive behind the sale is unclear, as the prospects for silver had begun to improve after a long period of oversupply and falling prices.
It followed the resignation of Sheikh Khalid bin Mahfouz, NCB's chief operating officer, who was charged last week with defrauding depositors of the collapsed Bank of Credit and Commerce International of more than dollars 300m.
Many investors are wary of silver. For five out of the past 12 years silver prices have been above dollars 8 an ounce. Some longer-term investors are looking at large losses.