- The price of Spot Silver crashed over 30% in a 24-hour period, plummeting below $80 per ounce while Gold saw a more moderate decline.
- Analysts attribute the sharp correction to heavy profit-booking, extremely overbought conditions, and a strengthening US dollar.
- President Trump‘s plan to nominate Kevin Warsh as the next Federal Reserve Chair triggered further selling, as his stance is seen as supportive of the dollar.
- Despite the crash, silver had previously surged nearly fourfold in a year and doubled since December alone on supply deficits and momentum buying.
- Traders await the upcoming U.S. jobs report for potential signals on interest rate cuts, which could further impact precious metal prices.
Precious metals investors faced a severe shock on Friday as silver suffered a dramatic collapse, losing over 30% of its value in 24 hours to fall below $80 per ounce. The crash, far steeper than Gold‘s concurrent drop, was driven by a sudden wave of profit-taking after an historic rally.
Consequently, analysts cited heavily overbought market conditions and a recovering US dollar as primary catalysts for the sharp correction. This plunge starkly reversed a historic run where silver had quadrupled in a year and doubled since December alone.
Meanwhile, political news accelerated the sell-off after President Trump announced his plan to nominate Kevin Warsh for Federal Reserve Chair. Investors rapidly sold metals to favor the US dollar, interpreting Warsh’s hawkish track record and support for Trump’s dollar policies as bullish for the currency.
Just a day earlier, spot silver had eased only 2.1% to $114.141 after reaching a peak of $121.64, riding a 60% monthly gain. Next, market participants are watching the imminent U.S. jobs report for January, due from the U.S. Bureau of Labor Statistics, for clues on interest rate movements.
Any indications of impending rate cuts could further depress Silver and Gold prices, according to traders monitoring the data. This would likely swing investor capital and hopes back toward the US dollar and traditional equity markets.
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