Silver Tumbles 16% From Record Highs as Dollar Rebounds

COMMODITIES
Whalesbook Logo
AuthorIshaan Verma|Published at:
Silver Tumbles 16% From Record Highs as Dollar Rebounds
Overview

Silver prices have sharply reversed, shedding 16% from recent record highs to hover near $65 per ounce. A resurgent US Dollar, fueled by hawkish Fed expectations and eased geopolitical tensions, is weighing on the white metal. Increased margin requirements by CME Group and potential crypto-related liquidations also contributed to the steep decline. Analysts suggest a technical correction, with UBS forecasting volatility but maintaining a $105/oz target for March 2026.

Silver prices are experiencing significant volatility, experiencing a dramatic 16% slide from their late January record highs to trade near $65 per ounce on Thursday. This sharp correction follows a period of strong investment demand, buoyed by a soft US Dollar and anticipation of Federal Reserve rate cuts.

Dollar Strength and Geopolitical Shifts

The recent rebound in the US Dollar, attributed partly to the nomination of Kevin Warsh, known for his hawkish monetary policy stance, has put pressure on dollar-denominated commodities like silver. Concurrently, easing geopolitical uncertainties, including scheduled US-Iran talks and positive US-China communications from President Donald Trump, have diminished silver's appeal as a safe-haven asset.

Margin Hikes and Market Mechanics

Adding to the downward pressure, CME Group has increased margin requirements for silver futures contracts. The margin for COMEX 5000 silver futures now stands at 18%, up from 15%, effective February 6, 2026. This move can reduce speculative leverage and curb price momentum. Some market observers, including Peter Schiff, have also pointed to potential crypto-related margin call liquidations as a factor in the price drop.

Analyst Outlook Amidst Volatility

Despite the steep pullback, analysts at UBS view the decline primarily as a technical correction rather than a fundamental shift. UBS maintains a short-term forecast of $105 per ounce for silver by March 2026, with further targets of $100 for June, $95 for September, and $85 by December. However, they caution that these forecasts must be considered within the context of extreme volatility, stretched market positioning, and fragile demand conditions. Further price adjustments may be necessary before a stable recovery base is established.

Disclaimer:This content is for educational and informational purposes only and does not constitute investment, financial, or trading advice, nor a recommendation to buy or sell any securities. Readers should consult a SEBI-registered advisor before making investment decisions, as markets involve risk and past performance does not guarantee future results. The publisher and authors accept no liability for any losses. Some content may be AI-generated and may contain errors; accuracy and completeness are not guaranteed. Views expressed do not reflect the publication’s editorial stance.