Silver Recovers, But Volatility Remains "Clinging"
Silver (XAG/USD) rebounded on Tuesday (February 3rd) after a "free fall" of more than 30% in the previous two sessions. The spot silver price is now back in the $87/oz area, indicating the market is starting to find its footing after an extreme correction.
This recovery follows a major wave of liquidation that pushed silver to the $71/oz area in the previous session. Many market participants viewed yesterday's decline as more of a "position cleanup" (profit taking + leverage forced exit) than a complete change in the fundamental story—so when selling pressure eased, prices quickly rebounded.
In terms of sentiment, the market mood also improved due to news of geopolitical and diplomatic de-escalation: the planned US-Iran nuclear summit offered hope that Middle East tensions would not worsen, while the announcement of a US-India trade deal reduced uncertainty. When risk appetite improves, commodity volatility typically subsides, supporting a price rebound.
However, there are still many "brakes" on the upside. The strengthening dollar could regain dominance following the nomination of Kevin Warsh (who is perceived as more hawkish) as the US central bank chairman, limiting the dollar's room for weakness—and this often puts pressure on USD-denominated commodities like silver.
Going forward, the market will focus on two things: (1) whether Asian buyers—especially from China—are truly "buying the dip" or continuing to reduce positions, and (2) whether geopolitical headlines heat up again. In the very short term, silver's movement remains vulnerable to "jolting" due to its still-high volatility, even though a rebound has occurred.
Source: Newsmaker.id
