MW Silver heads for biggest drop in 14 years, with 'every man and his dog rushing for the exit'

By Myra P. Saefong

Silver in January still is on pace for its best month since 1979

Silver futures fell below $100 an ounce on Jan. 30.

Silver's plunge on Friday put the the metal on track for its worst daily drop since 2011, in a move that one strategist referred to as "every man and his dog rushing for the exit."

President Donald Trump's nomination of Kevin Warsh as the next Federal Reserve chair fueled a recovery in the U.S. dollar DXY, with some analysts saying Warsh would be less supportive of lower interest rates than other potential candidates for the role. That prompted selling among precious-metals traders, but that may just be a bump in the road for silver's rally.

To some, Friday's move came as no surprise. "For some time now, it's been clear that conditions in the metals market were incredibly frothy, while signs emerged earlier this week that things were becoming downright disorderly," said Michael Brown, senior research strategist at Pepperstone.

Positioning in the gold (GC00) and silver market was also "clearly, incredibly crowded on the long side, while volatility had increased to, frankly, preposterous levels," he wrote in market commentary Friday. In a market with trading volumes at such high levels, and with "leveraged longs" - traders borrowing funds to buy more assets - so stretched, he noted that "it doesn't take much to trigger moves" like those seen Friday.

'Put simply, every man and his dog [is] rushing for the exit at the same time, forcing price lower, which in turn begets further forced selling.'Michael Brown, Pepperstone

"Put simply, every man and his dog [is] rushing for the exit at the same time, forcing price lower, which in turn begets further forced selling," Brown said, and that serves as a useful reminder that "momentum works both ways!"

In Friday dealings, the most-active March silver contract (SIH26) (SI00) was trading at $98.71 an ounce, down nearly 14% on Comex. It's poised to log its biggest one-day percentage decline since Sept. 23, 2011, according to Dow Jones Market Data.

Silver prices last settled at a record high on Monday of $115.504 and were trading up by nearly 39% for the month, on track for their best monthly performance since December 1979.

Gold for April delivery (GCJ26) was down 4.9% at $5,090.80 an ounce after settling Thursday at a record-high $5,354.80. It was still up around 17% for the month, which would be its best month since August 1982.

Read: Gold's searing run halted, silver briefly drops below $100 as Warsh nomination to Fed hits dollar debasement trade

The Warsh effect on metals

Warsh, Trump's pick to head the Fed, is a well-known critic of the U.S. central bank and has also been critical about easy money. He's been more aligned with a policy stance that's focused on curbing inflation, which could mean raising interest rates.

Read: Here's how Warsh's Senate confirmation is likely to go as a key Republican threatens to block it

Higher interest rates could boost the dollar and dull demand for dollar-denominated commodities. So for now, "the news of Trump's Fed chair nomination, Warsh, is said to be part of the trigger for today's 'WArSH' out in precious-metals prices," said Peter Spina, founder and president of investor websites GoldSeek.com and SilverSeek.com.

But the market has already seen some big percentage-term price corrections on this "very aggressive price run higher," he said. This is not likely to be any different, he said.

Silver prices "could get flushed out lower below $100 an ounce before returning back above the century mark," Spina said.

The white metal has a lot going for it. It's benefiting from safe-haven and store-of-value flows - similar to gold - and industrial demand, and is seeing a global supply deficit, said Nate Miller, vice president of product development at Amplify ETFs, which offers the Amplify Junior Silver Miners exchange-traded fund SILJ. There's also increasing attention on silver as a critical mineral, he said.

So some consolidation in silver after such a sharp advance is "healthy and consistent with how commodity markets typically behave following rapid price appreciation," Miller said, adding that volatility, for now, appears well within reason.

Read: Investors aren't scared of record gold and silver prices. Wall Street's price targets are struggling to keep up.

While it's true that the rally has clearly gone too far, too fast, it's not too late for investors to buy the metal, said Peter Grant, vice president and senior metals strategist at Zaner Metals.

Dips below $100 are an "opportunity," particularly around the 20-day moving average of roughly $93, Grant said. Still, "you have to be able to withstand the volatility, which is likely to remain high."

Read next: Former Goldman commodities guru sees another decade of rising prices for metals and critical minerals

-Myra P. Saefong

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January 30, 2026 12:25 ET (17:25 GMT)

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