Silver Recovers After Sharp Sell-off, Inflation Data in Focus

Silver traders are attempting a footing today after a historically sharp pullback, with prices briefly slipping below the $75 mark a day earlier and then catching some bids by Friday morning. The question on many minds is whether this bounce is merely a relief rally or the start of a more meaningful stabilization.

Key takeaways:
- Yesterday, silver fell by more than 10% at the session?s trough, reaching about $74.58 per troy ounce
- A potential rebound is forming today in the $76?$79 range
- The slide was driven by a liquidation wave, margin calls, and a firmer dollar
- The next catalyst for price expectations looks to be the upcoming US inflation data

What unleashed the decline

Thursday?s move looked like a broad-backed liquidation episode rather than a reaction to fresh supply-demand signals. Technical factors and forced selling played a central role, according to multiple reports.

A key driver appeared to be a concurrent rout in technology shares, which apparently triggered margin calls. Investors needed liquidity and, in the process, exited liquid positions even in established assets like precious metals. The pressure spread beyond silver to gold and copper as well.

Policy shifts and a stronger dollar

Over the past two days, macro forces intensified. The market flexed on the nomination of Kevin Warsh to chair the Federal Reserve, a stance viewed by traders as likely to favor a cautious pace of rate cuts. In this environment, the US dollar benefited, making non-yielding assets such as silver relativamente less attractive.

Meanwhile, fresh US payroll data reinforced this dynamic: January posted 130,000 new jobs, well above consensus expectations. The robust figure reduced the odds of imminent rate cuts and supported higher US Treasury yields, which in turn amplified the downturn pressure on commodities, contributing to the Thursday sell-off.

Volatility remains the defining trait

Friday?s morning activity showed some counter-movement, but the broader setup remains fragile. Earlier in January, silver had climbed to record highs above $100, underscoring the current market?s high volatility and speculative flavor.

Looking ahead

The immediate driver is the forthcoming US inflation data. These releases are expected to significantly shape rate expectations going forward and, by extension, influence whether silver steadies into a more stable recovery or sustains heightened swings. The market will be watching closely to see if inflation readings alter the trajectory for policy expectations and commodity prices alike.