Silver Markets Grapple with Unprecedented Price Swings

The silver market is witnessing its most turbulent period in more than forty years. Prices stabilized during US trading between $75.75 and $77.40 per troy ounce following a severe sell-off early Friday. Traders are noting this represents the highest level of volatility since 1980, a year often cited as a benchmark for extreme precious metals trading activity.

Silver is currently undergoing a significant correction following its all-time peak of $121.64 per ounce reached in January. The trading session on Friday concluded the metal's second consecutive week of losses. Market participants are now focused on the Asian market opening, where Chinese speculative activity has previously driven substantial price movements, to gauge the next directional move.

Exchange Margin Hikes Fuel Selling Pressure

The CME Group has moved for a third time in just two weeks to increase margin requirements for silver futures contracts. Effective after Friday's close, the performance bond will rise from 15% to 18%. This follows similar adjustments implemented on January 30 and February 2.

These repeated hikes by the derivatives exchange are placing considerable pressure on speculative traders. Market participants unable or unwilling to commit additional capital are forced to liquidate positions. This wave of compelled selling significantly intensified the downward momentum at the market's open.

Geopolitical Tensions Provide Temporary Support

A warning from the United States urging its citizens to leave Iran immediately sparked a classic flight to safety among investors. This escalation in Middle East tensions provided a counterbalance to the technical selling pressure. While gold posted notable gains, silver also benefited from the risk-off sentiment, recovering from its session lows.

Should investors sell immediately? Or is it worth buying Silber Preis?

Analysts are monitoring whether ongoing geopolitical uncertainty will prove sufficient to fully offset the selling pressure generated by the exchange's margin increases.

Monetary Policy Outlook Adds to Headwinds

The nomination of Kevin Warsh as the new Federal Reserve Chair is introducing additional market uncertainty. Warsh is perceived as a monetary policy hawk, fueling concerns over a potential shift toward tighter interest rate policy. Such an environment traditionally creates headwinds for non-yielding assets like precious metals.

In other economic developments, US consumer sentiment showed a slight improvement. The University of Michigan's sentiment index rose to 57.3 in February from 56.4 the previous month. The survey also indicated a modest increase in long-term inflation expectations.

Key Market Developments:
- Silver experienced extreme volatility following another CME margin intervention
- Margin requirements were raised for the third time in two weeks, now standing at 18%
- Geopolitical strains are offering short-term support to prices
- The correction from January's record high of $121.64 continues