Silver suffered a steep decline in a choppy session, emerging as the weakest performer among precious metals on renewed selling that largely erased gains posted earlier this week.
Spot silver were last down 14.7% to $75.18 an ounce, remaining near the lows seen during last week’s sharp rout. Silver futures for March delivery tumbled more than 11.5% to $74.68/oz.
Losses in the white metal intensified during the Asian trading session and coincided with a modest uptick in the U.S. dollar, a combination that weighed on prices.
Market context and strategist view
Christopher Wong, FX strategist at OCBC, highlighted ongoing sensitivities in the precious metals complex, noting how moves in the dollar, yields and Fed policy expectations continue to influence flows. "Even as prices of precious metals are now less elevated following the correction, sensitivity to [the U.S. dollar], yield repricing, and uncertainty around Fed policy under new leadership remains high. While positioning has likely reset to some extent, confidence may not have fully restored, pointing to a potential period of choppier, two-way trading," Wong said in an e-mailed comment.
Wong added that he saw the recent pullback more "as a normalization phase rather than a trend reversal," and argued that the underlying drivers of the rally remain in place. "While higher beta and sentiment-driven flows can amplify short-term volatility, medium-term fundamentals remain supported by demand from solar [photovoltaic], grid modernization and electrification themes, which should help cushion downside once positioning and sentiment stabilise," he said.
Dollar strength and policy signals
Strength in the dollar has been a key headwind for precious metals in recent sessions. The greenback bounced back from near four-year lows after U.S. President Donald Trump’s nominee for the next Federal Reserve Chair, Kevin Warsh, was seen as less dovish than markets had hoped, a development that has continued to pressure metal prices.
Traders also remained oriented toward the dollar ahead of central bank meetings in Europe scheduled for Thursday and ahead of U.S. nonfarm payrolls data. The payrolls report, originally due on Friday, was moved to February 11 after a partial government shutdown earlier in the week.
Outlook
Price action suggests an elevated period of volatility, with positioning and sentiment likely to play a large role in near-term swings. While short-term flows have driven a rapid decline from recent highs, market participants cited by strategists expect medium-term demand themes tied to industrial and policy-driven uses to provide some support when sentiment stabilises.
Key points
- Spot silver fell about 14.7% to $75.18 an ounce; March futures dropped more than 11.5% to $74.68/oz.
- Losses accelerated during the Asian session and were accompanied by a modestly stronger U.S. dollar.
- Market participants are awaiting central bank meetings in Europe and delayed U.S. payrolls data, creating directional uncertainty.
Risks and uncertainties
- Ongoing sensitivity to dollar moves and yield repricing could sustain two-way trading and amplify volatility - this affects precious metals and currency markets.
- Uncertainty around U.S. Fed leadership and policy expectations following the nomination of Kevin Warsh remains a headwind for metals.
- Near-term positioning and sentiment shifts could keep price swings sharp until central bank decisions and U.S. payrolls data provide clearer direction - this has implications for industrial users of silver.