MW Why silver prices cratered on a reported Russian proposal to re-dollarize

By Jules Rimmer

Silver prices fell from $85/oz to $74/oz after Russia reportedly offered to pivot back towards the dollar

Despite losing a third of its value, silver is still showing a double digit gain in 2026 so far and almost 140% in the last twelve months.

Silver prices were beginning to bounce back on Friday, one day after after a report that Russia proposed to re-dollarize its economy punished the metal.

Volatility has been silver's calling card in recent months but even by recent standards the last week has been a roller-coaster ride. Having touched $121 per ounce in late January, silver was sitting at $85 an ounce on Thursday before Bloomberg reported that the Kremlin had offered an economic package to the U.S. government in a bid to win its support in negotiations over Ukraine.

Silver, like gold (GC00) and other precious metals, has been a beneficiary of the trend for central banks to diversify their reserves away from the dollar in the wake of the freezing of Russian foreign exchange reserves in 2022.

The so-called debasement trade as well as a drive for hard assets in a period of rising inflation and its safe-haven allure have been the chief locomotives of the breathtaking rally in silver. Even after correcting by a third in February, its twelve-month return is still 138%.

Nonetheless, the extent of the rise in silver (SI00) was such that many of its previous champions were claiming its strength was overdone and recommended cashing in in January.

Silver futures on Nymex slumped to a low of $74 per ounce in Asian trading Friday morning before recovering a chunk of the gains. Early Friday morning, silver was trading just above $78.

Among the series of proposals pitched by Russia towards the Trump administration were offers of collaboration in fossil fuel production, joint ventures in natural gas projects, and offshore partnerships in oil and critical minerals. However, what caught the attention of commodity traders, already on the alert for sharp swings in sentiment after recent volatility, was the suggestion that Russia might return to the dollar DXY settlement system.

While Russia is just one of several countries, including China and India, that has considered reducing its dependency on the dollar for international commerce, the possibility of a thaw in Russo-American hostilities was enough to prompt another severe bout of profit-taking and liquidation of long positions in silver.

While these proposals have not been officially confirmed by either party, sentiment is so fickle at present and there is so much speculative activity in silver, especially in Asia, that any newsflow is having an exaggerated impact on the price.

While the reported proposal would not confirm a future of American financial hegemony any more than Russia's previous diversification efforts threatened to end it, there's no doubt an end to the conflict in Ukraine would reduce some of the geopolitical turbulence that has fueled the rally in precious metals.

-Jules Rimmer

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February 13, 2026 04:36 ET (09:36 GMT)

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