7% of silver recovers after falling to a high of seven percent
Silver is recovering from its biggest intraday swing since the 2008 financial crisis, rising above $110, down more than 7 percent from Monday's record high of $117.
The high volatility in precious metals reflects the lack of confidence in fiat currencies and government debt. With gold breaching $5,000 and silver posting its biggest swing in 17 years, markets are showing heightened concern over the fiscal sustainability of major economies — a sentiment that could ripple into risk assets, including cryptocurrencies.
Record growth meets sharp reversal.
The white metal rose 14 percent, posting its biggest daily jump since the global financial crisis. After finding support around $103, silver rallied back above $110 as Asian session buyers stepped in, narrowing losses to less than 5 percent.
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Gold touched $5,111.07 and retreated to around $5,100.
Debasement Trade Fuels Rally
A rise in the precious metal reflects investors' flight from currencies and government bonds amid rising fiscal concerns. A sharp sell-off in Japan's bond market last week underscored skepticism about higher government spending in major economies.
Max Belmont of First Eagle Investment Management said gold has historically served as a barometer of market stress, providing protection against inflation, unexpected market downturns and geopolitical explosions.
The dollar index fell 2% in six sessions on speculation that the U.S. could help Japan prop up the yen, adding to unexpected concerns about the Federal Reserve's independence and Trump administration policy.
Technical warnings appear.
Despite the historic gains, major refiner Heraeus Precious Metals warned that the rally could be overextended, citing technical indicators of overbought conditions and the compact gold-silver ratio now standing at 50, down from 100 a year ago.
J. Safra Sarasin's Claudio Weil warned that silver typically faces greater downside than gold because of its high volatility, suggesting that the risk-reward balance could worsen if momentum slows.
Key steps to be observed
Silver's ability to recover $110 will be crucial in the near term direction. Monday's rebound to $115.50 could form a V-shaped recovery narrative, while a break below $105 could signal a deeper correction ahead.
Markets now await the appointment of Trump's Fed chairman and this week's FOMC decision, with the central bank widely expected to pause its rate-cutting cycle.
