Silver prices experienced a dramatic drop on Thursday, February 5, 2026, falling more than 16% at one point and erasing the gains from a brief two-day recovery. This sharp decline follows a historic market rout that has left the precious metals sector reeling after a strong rally last month.
Spot silver tumbled as much as 16.6% during trading, briefly recovering above $90 per ounce in early Asian sessions before plunging again. By mid-morning in Singapore, silver was down nearly 14% at around $75.89 per ounce in one report, and another update showed it at $76.95 per ounce, reflecting a 12.7% decline. Spot gold also fell, dropping as much as 3.5% in volatile trading, with prices later settling around $4,859 per ounce, down about 2.1%.
This pullback comes after precious metals surged dramatically in January, driven by speculative buying, geopolitical tensions, and worries about the independence of the US Federal Reserve. The rally pushed silver to record highs before a sudden halt at the end of last week, when silver posted its largest single-day drop ever and gold saw its biggest plunge since 2013.
The recent volatility ties closely to developments at the Federal Reserve. President Donald Trump nominated Kevin Warsh as the next Fed chair, replacing Jerome Powell. In an NBC News interview, Trump commented that he would not have nominated Warsh if he had pushed for higher interest rates, and expressed confidence that the Fed would cut rates again. Lower interest rates typically support precious metals like gold and silver, since these assets do not pay interest and become more attractive when yields on other investments fall.
However, markets remain uncertain about the future direction of monetary policy under a potential Warsh-led Fed. Analysts note that this uncertainty is fueling short-term swings. Investors have been redeeming holdings from exchange-traded products, adding to the pressure.
“Sentiment seems to have turned soggy across most asset classes, including regional equities and metals,” said Christopher Wong, a strategist at Oversea-Chinese Banking Corp Ltd. “This underscores fragile sentiment and has created a feedback loop amid thin market liquidity.”
Analysts from Standard Chartered, including Sudakshina Unnikrishnan, warned that price action is likely to stay volatile until there’s more clarity on the monetary policy outlook. They pointed out that while near-term turbulence comes from redemptions and uncertainty, the longer-term structural drivers for precious metals remain strong. The bank continues to expect an eventual rebound higher.
Platinum and palladium also declined, while the Bloomberg Dollar Spot Index edged up slightly by 0.1%, contributing to the downward pressure on dollar-denominated metals.
Overall, the precious metals market has shown extreme swings in early 2026, with silver proving especially volatile due to its mix of investment appeal and industrial uses. Investors are watching closely for signs of stabilization as policy signals from the Fed become clearer.
