New York, February 2, 2026, 13:32 EST — Regular session
- Spot silver dropped roughly 10%, adding to Friday’s record dive amid choppy trading
- CME plans to implement higher margin requirements following Monday’s market close
- Investors are reassessing U.S. rate risk following President Donald Trump’s appointment of Kevin Warsh to head the Fed
Spot silver plunged again Monday, dropping 10.4% to $75.79 an ounce by 11:00 a.m. ET after earlier tumbling as much as 15%. The metal’s rapid selloff erased last week’s blistering rally. It’s now down about 37% from the record $121.64 peak hit just last week, following Friday’s steep 27% drop. (Reuters)
How fast the move happens is just as important as where it lands. Traders are testing a crowded trade, and when forced selling kicks in, it can ripple across markets as positions get slashed to meet collateral demands.
Traders are zeroing in on the plumbing. CME Group’s hike in margin requirements — the cash needed to hold futures positions — comes as investors weigh Trump’s pick of Warsh to succeed Federal Reserve Chair Jerome Powell in May. “The decision by markets to sell precious metals alongside U.S. equities suggests investors view Warsh as more hawkish,” said Vivek Dhar, commodities strategist at Commonwealth Bank of Australia, citing pressure from higher-for-longer rates and a stronger dollar. (Reuters)
The selloff revealed just how quickly silver can reverse once momentum falters. After reaching a record high on January 29, technical selling and stop-loss orders kicked in, triggering what Reuters called the largest single-day drop in LSEG data going back to 1982. Analysts warned of a potential deeper slide, with a “fundamentally supported” price zone around $60-$70. Saxo Bank’s Ole Hansen pointed to a “massive” retail buying spree flooding the market. (Reuters)
The slump is hitting stocks linked to the metal. Denmark’s Pandora saw its shares jump up to 10% in Europe, fueled by hopes of lower input costs following silver’s decline. Jyske Bank analyst Janne Vincent Kjaer noted, “The sharp increase in the silver price has been a key concern in the market over the last couple of months,” as investors zero in on Pandora’s margins and hedging ahead of its Feb. 5 earnings. (Reuters)
Banks are recalibrating their forecasts after recent volatility. JP Morgan noted that silver’s drivers have become less predictable and pointed out the absence of structural central-bank backing that supports its gold outlook. Still, the bank expects silver to maintain a higher floor than previous cycles. “We still do see a higher floor for silver on average (around $75-$80/oz),” JP Morgan said. (Reuters)
The downside remains clear: if volatility stays elevated and the dollar continues to strengthen, traders could face another wave of liquidation, no matter the longer-term supply factors. In such a market, the chart outweighs the narrative.
The next hurdle arrives after Monday’s close, as CME’s increased margin requirements kick in. Investors are also waiting on clearer signals from U.S. macro data, with the Labor Department announcing that January’s employment report won’t drop Friday due to the partial government shutdown. That leaves markets without a crucial short-term gauge on growth and interest rates. (Reuters)
