NEW YORK: Silver prices fell sharply on Thursday, extending a volatile run for the metal as fresh U.S. labor data pushed the U.S. dollar higher and pressured precious metals. Spot silver was down 8.9% at $76.54 per ounce by early afternoon in New York trading, after rising about 4% a day earlier. At the session low, silver traded around $74.4 per ounce, a drop of more than 10% on the day.
The selloff followed new U.S. employment figures showing the job market began 2026 on firmer footing than expected. Total nonfarm payrolls rose by 130,000 in January and the unemployment rate was 4.3%, according to the U.S. Bureau of Labor Statistics. Job gains were reported in health care, social assistance, and construction, while federal government and financial activities lost jobs. The BLS also reported average hourly earnings rose 0.4% in January to $37.17.
The labor report included revisions and annual benchmarking updates. Payroll gains for November were revised down to 41,000 from 56,000, and December payroll gains were revised down to 48,000 from 50,000. Benchmark revisions lowered the reported change in total nonfarm employment for 2025 to 181,000 from 584,000. The revisions were issued as part of the annual benchmarking process and updates to seasonal adjustment factors in the establishment survey.
Alongside the employment report, weekly jobless claims remained low. Initial claims for the week ended Feb. 7 fell by 5,000 to 227,000, according to the U.S. Labor Department. The four-week moving average rose to 219,500, and continuing claims for the prior week increased to 1.86 million. The release came as precious metals moved lower broadly, with spot gold down 2.8% at $4,938.69 per ounce and U.S. gold futures settling at $4,948.40.
Margin requirements and volatility
The latest slide unfolded in a market already shaped by large swings and tighter trading conditions in futures. CME Group raised initial and maintenance margins for COMEX 5,000-ounce silver futures to 18% from 15%, effective after the close on Feb. 6. CME also lifted margins for COMEX 100 gold futures to 9% from 8%. CME has cited heightened volatility in precious metals in recent weeks and has adjusted margin requirements multiple times since mid-January.
CME changed how it sets margins on Jan. 13, shifting to a percentage of contract value for major precious metals contracts after previously using fixed dollar amounts. Since that change, CME has raised margins three times, with hikes dated Jan. 30, Feb. 2, and Feb. 6. Margin requirements are deposits paid by futures market participants to cover the risk of default at the clearing level, and exchanges can increase margins during periods of rapid price movement.
Silver has also been coming off a dramatic peak and reversal. The Silver Institute said silver rose 147% in 2025 and reached a record high of $121.60 on Jan. 29, driven by strong retail investment flows at the start of the year. Prices later fell sharply from that high and remained prone to large day-to-day moves. During the latest session, silver fell from the low-to-mid $80 range to the mid $70s within hours as the dollar strengthened following U.S. data releases.
Supply and demand backdrop
The Silver Institute said global silver demand is expected to be steady in 2026, with higher physical investment offsetting declines in several consumption categories. It projected a structural market deficit of 67 million troy ounces this year. Industrial fabrication is forecast to fall 2% to 650 million ounces, while jewelry demand is projected to drop 9% to 178 million ounces and silverware demand to decline 17%. Physical investment is expected to rise 20% to 227 million ounces.
On the supply side, the Silver Institute forecast total global silver supply will rise 1.5% to a decade high of 1.05 billion ounces. Mine production is expected to increase 1% to 820 million ounces, while recycling is set to rise 7% and exceed 200 million ounces for the first time since 2012. Separately, London vault holdings of silver totaled 27,729 metric tons at the end of January, down 0.3% from December, according to the London Bullion Market Association.
By late Thursday, the most actively traded U.S. silver futures contract had fallen from an intraday high near $84.9 to a low near $74.6, settling around $75.3. Despite the decline, silver remained near $81 earlier this week and was up about 14% for the year before Thursday’s drop. Markets were also scheduled to receive the U.S. consumer price index report on Friday. – By Content Syndication Services.
