Silver "Battered," Dollar & Fed Are the Main Burdens
Silver remains "battered" on Thursday (February 5th), despite having pared some losses ahead of the European session. XAG/USD was last trading around $80.5/oz, after opening around $88.2. This means silver is still down approximately 8–9% today, though not as sharply as the panic peak at the start of the session.
What surprised the market: selling pressure exploded, dragging prices to a daily range of $73.56–$90.41—indicating extreme volatility. So, although it has now "climbed" from its intraday low, silver remains in a vulnerable zone as market participants continue to search for a clear "price floor."
From a fundamental perspective, the Fed's tone is again weighing heavily. Fed Governor Lisa Cook emphasized that her focus remains on inflation and wants to see stronger evidence before supporting further interest rate cuts. This message tends to be read as hawkish: yields could remain high, which is usually unfriendly for non-yielding precious metals.
The second factor: the US dollar. When the dollar strengthens, silver (priced in dollars) becomes more expensive for buyers outside the US, automatically weakening demand. Furthermore, expectations that interest rates could remain "higher for longer" increase the opportunity cost of holding silver.
Meanwhile, geopolitical factors briefly boosted safe-haven sentiment, but this momentum quickly faded as the market saw the possibility of US-Iran diplomacy continuing. Confirmation of the negotiations has reduced some of the risk premium that had been invested in precious metals—although volatile headlines continue to make the market susceptible to shocks.
In conclusion, silver is in a post-major turmoil "repricing" phase—a rebound is possible, but the road will be bumpy. As long as the dollar remains strong and the market holds back expectations of a rate cut, silver has the potential to continue moving aggressively within a wide range, and geopolitical headlines could trigger the next surge in volatility.
Source: Newsmaker.id
