By Giulia Petroni
Silver prices tumbled after a brief two-day rebound, as volatility remains elevated and the market struggles to find footing following last week's historic selloff.
In midmorning European trade on Thursday, New York futures traded 7.6% lower to $78.01 a troy ounce, while spot silver slid 11.1% to $78.56 an ounce. The white metal surged above $120 last month during a breaking-record rally, before plunging more than 30% last Friday.
"Heavy selling emerged in the Chinese futures market and on the CME after failing to break resistance at $90.50," analysts at Saxo Bank said. "Until market plumbing improves--through lower volatility and better liquidity--silver is likely to continue trading violently in both directions."
The U.S. dollar index--which measures the greenback against a basket of major currencies--was up 0.3% to 97.89, making dollar-denominated commodities more expensive to overseas buyers.
Precious metals have shattered records over the past year, driven by central-bank purchases and strong inflows into exchange-traded funds as investors moved away from sovereign bonds and currencies in favor of hard assets.
Last week's selloff in metals was triggered by a rebound in the dollar, prompting widespread profit-taking after President Trump nominated Kevin Warsh as Federal Reserve chair, a candidate seen as more hawkish by markets. Silver's pullback, however, was far steeper than gold, as tight liquidity in the London market continues to amplify price swings in both directions.
Goldman Sachs cautioned that thin inventories have created squeeze-like conditions, with rallies accelerating as investor demand absorbs available metal and reversing sharply when supply pressures ease. Meanwhile, top commodity exchange CME Group raised margin requirements, a move that increases the cost of holding positions, typically weighing on prices and trading activity.
Write to Giulia Petroni at giulia.petroni@wsj.com
(END) Dow Jones Newswires
02-05-26 0524ET
