Silver Soars, But Markets Remain Full of Surprises
Silver prices surged more than 10% to around $87.50/ounce on Tuesday (February 3rd), rebounding sharply after two consecutive waves of selling pressure. Previously, silver had fallen sharply—falling heavily on Friday, then falling further on Monday—making its movement one of the most volatile in this period.
The primary trigger came from a "clean-out" of positions after an overly rapid rally. Many market participants locked in profits after silver hit a new record last week. When prices began to reverse, the effects quickly escalated because markets already saturated with speculative positions are typically sensitive to stop-losses and margin calls.
Sentiment intensified after Donald Trump nominated Kevin Warsh as the next Federal Reserve chairman. Warsh was seen as more "tight" on inflation than some market expectations, giving the dollar and yields a brief boost, putting pressure on non-yielding precious metals like silver.
Prior to this correction, silver was supported by a combination of major factors: rising geopolitical and economic uncertainty, concerns about currency depreciation, and the issue of central bank independence—all of which boosted interest in safe-haven assets. At the same time, the "supply" story also fueled the rally: the silver market was still considered to be experiencing a structural deficit, coupled with strong investment flows, particularly from Chinese speculators.
Looking ahead, geopolitical risks could still trigger new volatility. The market is monitoring the agenda of the United States-Iran talks scheduled for Friday and developments in the Russia-Ukraine war amid plans for new peace negotiations. This means silver could continue to recover, but the path will likely remain bumpy.
Source: Newsmaker.id
