Silver was trading near $76.60 in Asian hours on Friday after dropping more than 11% late on Thursday. The fall came as equities turned risk-off and Silver moved lower in a rapid sell-off linked to algorithmic trading.<\/p>\n
The decline followed weakness in technology shares and market moves tied to concerns about Artificial Intelligence. Margin calls were also cited as a factor that may have added to losses in precious metals.<\/p>\n
Markets expect the Federal Reserve to keep interest rates higher for longer after strong US jobs data, which can weigh on non-yielding assets such as Silver. Pricing implies about a 92% chance of no change at the next meeting, while the chance of a cut by June is near 50%, based on the CME FedWatch tool.<\/p>\n
The Silver Institute said on Tuesday that global silver demand is expected to be steady in 2026. It said gains in retail investment are expected to offset most losses in industrial, jewellery, and silverware demand.<\/p>\n
Traders are watching the US CPI report due later on Friday for direction. Headline and core CPI are expected at 2.5% year on year in January.<\/p>\n
We are seeing silver attempt to stabilize around $76.60 after the sudden 11% plunge, which was clearly driven by algorithmic selling tied to the risk-off mood in technology stocks. The CBOE Volatility Index (VIX), a key measure of market fear, spiked above 22 yesterday, confirming that this is a broad-based market panic, not just a silver-specific event. This spike in implied volatility makes option premiums more expensive but also points to significant expected price swings.<\/p>\n
All focus now shifts to the US Consumer Price Index (CPI) report due later today. Should the inflation figures come in above the 2.5% expectation, similar to the upside surprises we saw in the final quarter of 2025, it would solidify the Federal Reserve’s stance on holding interest rates higher for longer. This scenario would likely trigger another leg down for a non-yielding asset like silver.<\/p>\n
For derivative traders, this environment suggests buying put options to hedge against a further drop, especially ahead of the CPI release. The recent 11% move shows how quickly the price can fall, so having downside protection is crucial. On the other hand, for those anticipating a dovish inflation surprise, short-dated call options offer a leveraged way to play a potential rebound from these oversold levels.<\/p>\n
This type of violent price action is reminiscent of the flash crash we witnessed back in August of 2021, showing how fragile liquidity can be. Therefore, establishing long straddles or strangles could be a sensible approach for the coming weeks. This strategy allows us to profit from a large price move in either direction, capitalizing on the high volatility without having to predict the outcome of the Fed’s next moves.<\/p>\n
Looking past the immediate macro noise, the fundamental demand picture provides some support. While the Silver Institute recently noted weakening jewelry demand, we know that industrial demand from solar and electric vehicle manufacturing remains robust, consuming a record 215 million ounces in 2025. This strong underlying industrial use case could create a price floor once the current wave of speculative selling exhausts itself.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" Silver hovered near $76.60 after an 11% algorithm-driven plunge; Fed outlook and CPI awaited for direction.<\/p>\n","protected":false},"author":62,"featured_media":16975,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-41781","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/41781","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/users\/62"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/comments?post=41781"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/41781\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media\/16975"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media?parent=41781"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/categories?post=41781"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/tags?post=41781"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}