Recovery Fails: Silver Falls Sharply, Sentiment Returns to Panic
Silver prices have fallen sharply again, erasing the recovery from the past two days. In trading on Thursday (February 5th), spot silver (XAG/USD) briefly fell to the $73/oz area before rebounding, and is currently hovering around $76.6/oz (down 13%) — confirming that the market has yet to find a comfortable price floor.
This wild movement follows last month's overheated silver rally. After briefly breaking new highs, silver has retreated significantly from its highs, and each rapid rebound is immediately met with subsequent selling — a sign that market participants are still focused on risk reduction, not adding to positions.
One of the triggers is fragile market sentiment and thin liquidity, which exacerbates the extreme movements. When prices start to fall, the effect can be a feedback loop: stop-losses are triggered, margin calls are triggered, and leveraged positions are forced to close — resulting in a more vertical decline.
From a macro perspective, the market is also reassessing the direction of US interest rates in light of increasingly sensitive Fed dynamics. The combination of a strengthening dollar and uncertainty about the policy outlook makes precious metals (which don't yield) susceptible to profit-taking and portfolio rebalancing.
The impact isn't limited to silver. Gold also slipped (around $4.8k/oz, down around 2%–3% in the same session) — indicating this sell-off is broader in nature across precious metals, not just silver.
The bottom line: silver is known to be more volatile than gold due to its smaller market size. But the scale of its movements is now "on a different level" due to a combination of large speculative flows, unwinding leverage, and volatile market conditions. Until there's a catalyst to stabilize its positioning, silver's movements have the potential to remain volatile.
Source: Newsmaker.id
