Silver’s Path Forward: Consolidation and Key Levels After January’s Plunge

abrdn Physical Silver Shares ETF US0032641088

The silver market is currently consolidating following a severe sell-off at the end of January. While the long-term outlook remains supported by fundamental supply dynamics, investors are closely watching upcoming U.S. economic data for clues on monetary policy direction under the Federal Reserve's new leadership.

Trading on January 30, 2026, delivered a shock to precious metals markets. Prices plummeted approximately 30 percent following news of Kevin Warsh's nomination as the new Fed Chair. Market participants interpreted this personnel move as a potential signal for a stronger U.S. dollar and a more hawkish monetary policy stance, triggering widespread liquidations.

Despite this sharp correction, silver's longer-term performance record is notable. The abrdn Physical Silver Shares ETF (SIVR) delivered a return of 148.3 percent in 2025, with prices trading in a range between roughly $28 and over $110 per ounce.

Fundamental Support from Industrial Demand

Analysts point to persistent structural tailwinds for the physical metal. The market is anticipated to experience its sixth consecutive year of a structural supply deficit in 2026. J.P. Morgan Global Research forecasts an average price of $81 per ounce for the current year, citing robust industrial consumption which accounts for about 60 percent of total demand.

Key sectors driving this consumption include:
* Renewable Energy: The continued global expansion of solar panel manufacturing capacity.
* Advanced Technology: Increased silver usage in AI-powered data centers and the broader semiconductor industry.

A primary risk to this demand stems from the elevated price environment itself. Sustained high levels could incentivize manufacturers to reduce silver content in their products or seek cheaper substitute materials, such as copper or aluminum.

Technical and Macroeconomic Crosscurrents

As trading begins on February 16, market focus shifts to a slate of upcoming U.S. economic indicators. The core PCE inflation data and GDP figures due later in the week are expected to provide critical insight into the interest rate path the newly-led Federal Reserve will ultimately pursue.

From a chart perspective, silver faces a significant technical resistance zone between $79 and $80. A sustained breakout above this level could indicate the consolidation phase is ending. Conversely, a breach of the support level at $70—which was tested on February 5—would likely invite renewed selling pressure.

Evaluating Physical ETF Options

For investors seeking exposure to physically-backed silver, the cost structure of available products is a key differentiator. The SIVR ETF positions itself as a lower-cost option with a total expense ratio of 0.30 percent, compared to the 0.50 percent charged by the iShares Silver Trust (SLV).

While SLV offers greater liquidity for short-term traders due to its enormous trading volume, the SIVR fund's structure is generally geared toward buy-and-hold investors. Nevertheless, SIVR demonstrated solid liquidity with a trading volume of 4.1 million shares this past Friday.