Silver balances recovery amidst Lunar New Year pressures

On Monday, silver staged a modest recovery to around $82 per ounce, stabilizing after a historic rout that had wiped out nearly half of the metal's value since its January 29 peak. The rebound was largely driven by speculative investors cautiously reentering the market following several weeks of extreme volatility. Their presence offers a fragile floor for prices, though overall trading activity is thinning as the holiday season looms.

News of Kevin Warsh's appointment as the next Fed Chair sparked a sharp sell-off across precious metals, setting off a rush to unwind positions. Both Chinese retail traders and Western investors scrambled to liquidate, accelerating the downturn. Compounding the pressure is the upcoming week-long Lunar New Year holiday, starting February 16. Typically, Asian players scale back their exposure to avoid risk during the extended market closure, thus draining liquidity and stripping a key source of supportive buying.

Repeated hikes in margin requirements added fuel to the downdraft. The CME Group raised rates for silver futures three times in just two weeks, pushing them as high as 18%. This aggressive tightening squeezed leveraged traders, forcing many to either inject fresh capital or exit their positions entirely, and triggering waves of selling that fed the decline.

Yet, beyond the short-term turmoil, the longer-term outlook remains positive. Silver's fundamental appeal endures, underpinned by its critical role as an industrial metal in the global push toward electrification and artificial intelligence (AI) infrastructure, alongside persistent worries over potential dollar debasement. 

From a technical standpoint, the market seems to be catching its breath following last week's recovery. Still, signs are emerging that upward momentum may resume. The Chaikin Oscillator is now climbing out of negative territory, signaling fading selling pressure and growing buying interest. In the meantime, the Stochastic Indicator has triggered a bullish crossover, pointing to potential upside ahead.

Pay attention to the following plan for your trading:

Sell silver ahead of the Chinese holidays, i.e., when the price reaches $95.00. Lock in profits at $69.00. Place Stop loss at $99.00.

This forecast holds true from February 9 till February 16, 2026.