Silver seeks firmer ground after historic plunge

Following the recent hysteria, the silver market appears to have calmed down and found the bottom on February 2, 2026. In just a few days, the precious metal lost around 40% of its value, plummeting from a record high of $121 to around $74.

The technical picture on the daily chart confirms a correction. According to Bollinger Bands, the current price is below the middle line (92.706), suggesting that downward momentum is gaining strength. A wide gap between the upper (117.479) and lower (67.932) bands reflects increased volatility of recent trading sessions. However, this divergence is narrowing as the storm clears.

Meanwhile, the Stochastic Indicator may be the main doomer, with a bearish crossover of its %K (61) and %D (71) lines. They are slowly running away from the upper part of neutral territory toward lower levels, signaling waning buyer momentum and cooling market conditions. The Chaikin Oscillator, stuck in the negative zone, points out that selling volumes exceed purchases—further evidence that bears are in control.

Fundamentally, silver’s slump was triggered by Kevin Warsh’s appointment as the US Federal Reserve (Fed) Chairman after Jerome Powell’s resignation. Markets view the new candidate as an advocate for tighter monetary conditions. Such an environment is typically favorable for the dollar and less friendly to precious metals. Furthermore, CME Group has just revised margin requirements for silver futures, raising them from 11% to 15% and contributing to lower prices.

Nevertheless, the asset’s structural growth factors, which bolstered it to unbelievable highs prior to the recent collapse, remain acute. A supply deficit and robust industrial demand (60% of total consumption levels) continue to underpin quotes. JPMorgan forecasts that the metal is unlikely to surrender all its gains and may temporarily consolidate within the $75–$80 range. Therefore, the current correction should be considered a healthy one.

Take into account the following trading strategy:

Buy silver near $73–$75 in anticipation of a rebound to the middle Bollinger Band. Place Take profit at $92.00 and Stop loss at $66.50.

This forecast remains relevant between February 2 and February 9, 2026.