Volatility Not Over Yet: Silver Remains Vulnerable at the Start of the Week
Silver prices (XAG/USD) continued their decline after the extreme decline of the previous week. In trading on Monday (February 2nd), silver moved weakly, and the market appeared to have yet to fully "calm down" as overcrowded positions continue to be slowly unloaded.
The latest spot silver price is currently in the range of $77.85/oz – $78.00/oz. This movement keeps silver near a vulnerable area, as sentiment remains volatile due to the dollar, interest rates, and geopolitical headlines.
One of the main triggers of pressure is the shift in monetary policy expectations after Donald Trump nominated Kevin Warsh to lead the next Federal Reserve. The market interpreted this move as a signal of a more "disciplined" approach and a delay in policy easing—as a result, the dollar tended to strengthen and precious metals became less attractive.
Pressure also came from a classic factor: profit-taking after a "very strong" rally that pushed silver to a record, then reversed sharply. Once the direction changed, volatility exploded, and selling accelerated as many speculative positions exited simultaneously.
In terms of risk sentiment, the appeal of safe havens has also faded as tensions between Iran and the US appear to have cooled slightly through signs of negotiations. Furthermore, comments by several Fed officials—such as Alberto Musalem and Raphael Bostic—tending to the "hold on, don't aggressively cut interest rates" sentiment have made the market increasingly cautious about pursuing precious metals again.
However, the big story isn't dead yet: some market participants still see silver as having a "tailwind" from long-term issues such as debt concerns, the search for physical assets, and potentially tight supply-demand conditions. But in the short term, after the rally broke out and volatility remains high, silver remains vulnerable—the market focus now is not "when will it rise again," but "where can it stabilize first."
Source: Newsmaker.id
