Silver Prices Plunge 37% in Record Single-Day Fall: Three Key Factors Explained
Commodities
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CNBC TV18•01-02-2026, 03:32
Silver Prices Plunge 37% in Record Single-Day Fall: Three Key Factors Explained
- •Spot Silver prices plummeted 37% on Friday, January 30, marking their largest single-day fall ever, with futures dropping 31%.
- •The appointment of Kevin Warsh, an advocate for central bank independence and an "inflation-hawk," as the new Fed Chair eased concerns about the US Federal Reserve's independence, negatively impacting precious metals.
- •Warsh's nomination triggered a sharp reversal and the biggest single-day gain for the US Dollar since May last year, making dollar-priced precious metals more expensive and reducing demand.
- •Technical factors like an "overbought" Relative Strength Index (RSI) for Silver (above 80) and a 36% reduction in net-long positions by hedge funds contributed to the sell-off.
- •Increased margin requirements, liquidation of speculative positions, and profit-booking by investors further accelerated the price decline.
Why It Matters: Silver prices crashed 37% due to a new Fed Chair, a stronger US Dollar, and technical market corrections.
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