Silver Slips as Risk Appetite Builds and Fed Cut Bets Recede

Written by Sandra Leggero

Sandra Leggero has a background in financial markets, having spent more than 9 years in commodities trading for several European and Asian companies. She holds a degree in Economics from the University of Pavia and specializes in emerging markets.

, | Updated: January 16, 2026

Key Moments

Silver (XAG/USD) falls for a second straight session, trading near $91.00 on Friday in Europe.
Improving risk sentiment and easing concerns about geopolitics and Fed independence reduce safe-haven demand for Silver.
US Initial Jobless Claims drop to 198K, reinforcing expectations that the Fed will keep rates steady at its January 27-28 meeting.

Market Overview

Silver prices continue to move lower for a second day, hovering around $91.00 during European trading on Friday. Investors are reducing exposure to safe-haven assets as risk sentiment improves. Geopolitical concerns and worries over Federal Reserve independence have also eased.

Geopolitics and Fed Independence

Sentiment gained support after US President Donald Trump signaled he would step back from threats of military action. Reports suggested Israel and other allies encouraged the US to postpone action, reducing the risk of retaliation. Meanwhile, Trump confirmed he has no plans to dismiss Fed Chair Jerome Powell. In addition, the US and Taiwan signed a trade deal to boost semiconductor production, reinforcing a risk-on backdrop.

Labor Data Supports Fed Rate Outlook

As a non-interest-bearing asset, Silver struggles amid expectations that US interest rates will remain high. US Initial Jobless Claims fell to 198K for the week ended January 10, below the forecast of 215K and prior revised 207K. This suggests layoffs remain limited and the labor market is resilient despite high borrowing costs.

The CME FedWatch tool shows a ~95% probability that rates remain unchanged at the January 27–28 meeting. Futures markets have shifted expectations for the next rate cut to June, reflecting ongoing inflation concerns.

US Labor Market Data

Indicator	Latest	Expectation	Previous (Revised)	Implication
US Initial Jobless Claims (week ended Jan 10)	198K	215K	207K	Limited layoffs, resilient labor market
Fed funds futures – Jan 27–28 meeting	~95% no change	N/A	N/A	Supports higher-for-longer rates
Next expected rate cut	June	N/A	N/A	Reflects persistent inflation concerns

Silver FAQs

Why invest in Silver?

Silver is a widely traded precious metal. It has been used as a store of value and a medium of exchange. Although less popular than Gold, it helps diversify portfolios. Traders may buy physical Silver or use Exchange Traded Funds (ETFs) that track international prices.

What affects Silver prices?

Silver responds to many factors. Geopolitical instability or recession fears increase demand due to its safe-haven status. Interest rates also matter: lower rates generally push prices up. Silver is priced in USD, so a strong Dollar can suppress prices, while a weak Dollar can push them higher. Other factors include investment demand, mining supply, and recycling rates.

Industrial demand

Silver is heavily used in electronics and solar energy due to its high electrical conductivity. Higher industrial demand raises prices, while a slowdown can reduce them. Economic activity in the US, China, and India also affects Silver’s price.

Relation to Gold

Silver generally follows Gold’s moves. The Gold/Silver ratio indicates relative valuation: a high ratio may suggest Silver is undervalued, while a low ratio may indicate Gold is undervalued.