Silver's Retreat From January Peak Deepens as Dollar Strength and Xi's Washington Visit Weigh on Sentiment

Silver closed at USD 64.28/oz, about 47% below its January 29 high of USD 121.78, as a firm dollar and Fed tightening bets weigh on prices.

Silver prices remain locked in a consolidation phase well below the record territory reached at the start of the year, with the white metal closing Thursday's COMEX session at USD 64.28 per troy ounce. That leaves the metal roughly 47 percent adrift from its 52-week high of USD 121.78, set on January 29, 2026, when prices briefly approached the USD 122 mark.

The pullback reflects a confluence of forces that have sapped momentum from precious metals broadly. Chief among them is the foreign exchange market, where restrictive signals from the US Federal Reserve have hoisted the dollar to a two-month peak. Because silver is denominated in the US currency and, unlike fixed-income instruments, generates no ongoing yield, a firmer greenback and rising rate expectations tend to erode demand from institutional investors. Reuters reported that both gold and silver came under pressure as speculation about additional Fed tightening fueled dollar strength, a dynamic that visibly capped gains on Wednesday.

Geopolitics has added another layer of uncertainty. Xi Jinping's first visit to Washington in eleven years has unsettled traders assessing the future of trade relations and, by extension, industrial demand for the metal.

Warehouse Data Reveals Shifting Composition

Nervousness among market participants has also shown up in CME Group inventory figures in recent days. As of September 18, 6,168 delivery notices had been filed for the current contract month, representing 30.84 million ounces. Total silver stocks held in COMEX warehouses meanwhile fell from 337.2 million ounces to 330.1 million ounces between September 10 and 17.

Beneath that headline decline lies a compositional shift: registered stocks rose by 1.4 million ounces to 97.3 million ounces, while eligible holdings contracted by roughly 8.6 million ounces to 232.8 million ounces.

In a bid to broaden access for smaller participants, the exchange also expanded its product offering. During the first weekend of round-the-clock trading, 2,387 contracts of the smaller 100-ounce silver futures changed hands, according to CME Group data.

Asian Factory Output Offers Partial Relief

On the fundamental demand side, economic data from Asia provided some modest encouragement. China's industrial production rose 5.2 percent year-on-year in August, accelerating from a 4.5 percent gain in July. Given silver's extensive use in electronics and solar manufacturing, Asian industrial output is viewed as a key driver of physical consumption.

Despite the current price weakness, market observers are formulating constructive medium-term forecasts, pointing to the trading environment in sister metal gold as a source of support. Media reports noted that the price fluctuated noticeably during US trading hours, quickly surrendering tentative recovery attempts. Handelsblatt examined the obstacles standing in the way of a return to higher levels.

Much of the market's attention is now fixed on when the price can sustainably clear the USD 70 per troy ounce threshold. Even after the sharp correction from first-quarter records, observers see scope for a trend reversal in the medium term.

Measured against its closing level from roughly a year ago, silver still boasts a gain of 43 percent despite the months of consolidation. Whether US monetary policy continues to weigh on yields for non-interest-bearing metals — or the market finds fresh catalysts — will determine the path ahead. For now, the chart remains vulnerable as long as rate and currency developments dominate the narrative.