Key Moments
- Spot silver dropped as much as 16.7% to $73.5565 an ounce, with March futures sliding more than 10% to $73.383/oz.
- The decline came abruptly during Asian trading and coincided with a modest strengthening of the U.S. dollar.
- Analysts described the pullback as a normalization phase, with underlying demand drivers for precious metals still seen as intact.
Silver Leads Broad Pullback in Precious Metals
Investing.com – Silver prices fell sharply in Asian trading on Thursday, spearheading declines across the precious metals complex as a fresh wave of selling pressure largely erased a recent, short-lived rebound.
Spot silver slid as much as 16.7% to $73.5565 per ounce, pulling the metal back toward levels seen during last week’s heavy rout. Silver futures for March delivery also came under pressure, dropping more than 10% to $73.383 per ounce.
The selloff developed suddenly during the Asian session and was accompanied by a modest uptick in the U.S. dollar, adding to the headwinds facing precious metals.
Analyst: Volatility High, But Trend Not Yet Reversed
Commentary from market strategists suggested that, despite the scale of the move, the broader backdrop for precious metals had not fundamentally changed.
“Even as prices of precious metals are now less elevated following the correction, sensitivity to the USD, 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,” Christopher Wong, FX strategist at OCBC said in a mailed comment.
Wong characterized the latest pullback as a phase of adjustment rather than a shift in the overall trend for the sector.
Still, Wong viewed the recent precious metals pullback more “as a normalisation phase rather than a trend reversal,” adding that the fundamentals behind the metal rally– central bank demand for gold and industrial demand for silver– still remained intact.
“While higher beta and sentiment-driven flows can amplify short-term volatility, medium-term fundamentals remain supported by demand from solar PV, grid modernisation and electrification themes, which should help cushion downside once positioning and sentiment stabilise,” Wong said.
Market Levels at a Glance
| Instrument | Contract/Type | Move | Price |
|---|---|---|---|
| Spot silver | – | Slumped as much as 16.7% | $73.5565/oz |
| Silver futures | March delivery | Tumbled more than 10% | $73.383/oz |
Dollar Rebound and Fed Expectations Pressure Metals
Recent strength in the U.S. currency has been a key drag on precious metals. The dollar recovered from levels near four-year lows after U.S. President Donald Trump’s nominee for the next Federal Reserve Chair, Kevin Warsh, was perceived as less dovish than many market participants had anticipated.
This reassessment continued to weigh on metals in recent sessions, as traders adjusted to the prospect of a policy stance that may be tighter than previously expected.
Event Risk Ahead: Central Banks and Jobs Data
Positioning in foreign exchange and metals markets also reflected caution ahead of upcoming policy and economic events. Traders remained broadly supportive of the dollar going into key central bank meetings in Europe on Thursday, as well as the release of U.S. nonfarm payrolls data next week.
The payrolls report, initially slated for Friday, was postponed to February 11 following a partial government shutdown earlier in the week, adding a further layer of uncertainty for markets awaiting clarity on the U.S. labor backdrop.
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