Silver markets experienced a dramatic reversal on Thursday, February 12, 2026, erasing the prior session's gains in a sharp selloff. The precious metal's price action turned decisively negative as traders adjusted positions ahead of a critical U.S. inflation report scheduled for release the following day.
Precipitous Decline in Spot and Futures Prices
Spot silver plunged 9.4% to $76.37 per troy ounce by midday trading in New York. The session was marked by extreme volatility, with the metal swinging between a daily low of $74.97 and a peak of $84.98. This represented a steep fall from levels just under $85 reached during Wednesday's trading. Silver futures followed a similar trajectory, recently quoted at $77.01 an ounce, down significantly from the previous settlement of $83.92. Futures contracts traded within a range of approximately $74.91 to $84.83 throughout the day.
ETF and Mining Equities Under Pressure
The downdraft in the physical metal translated into substantial losses for silver-linked investment vehicles and producers. The iShares Silver Trust (SLV), a major exchange-traded fund, dropped 9.8%. The Sprott Physical Silver Trust fared even worse, shedding 11.1%. Mining equities were not spared. Hecla Mining saw its shares decline 8.8%, while First Majestic Silver retreated 7.5%. Pan American Silver finished the session down 6.4%.
The selloff interrupted a period of notable strength for the white metal. Just one day prior, on Wednesday, spot silver had jumped 4.6% to $84.39, recovering from an earlier bout of profit-taking. This recent volatility underscores the metal's sensitivity to shifting macroeconomic expectations, particularly regarding monetary policy.
Macroeconomic Data Shifts Rate Expectations
The catalyst for Thursday's decline appeared to be a reassessment of the Federal Reserve's interest rate path following robust U.S. employment data. Fresh government figures showed nonfarm payrolls added 130,000 jobs in January, while the unemployment rate dipped to 4.3%. Concurrently, weekly jobless claims fell to 227,000. This data collectively suggested a resilient labor market, leading traders to scale back bets on imminent Federal Reserve rate cuts.
"It dims the likelihood of Fed rate cuts in the first half of this year," noted Peter Grant, Vice President and Senior Metals Strategist at Zaner Metals. He added that despite the price retreat, geopolitical tensions, such as those between the U.S. and Iran, could provide "a bit of a tailwind" for safe-haven demand. The market's focus has now squarely shifted to the January Consumer Price Index (CPI) report, set for release on Friday, February 13, at 8:30 a.m. ET from the Labor Department.
Silver's Dual Nature and Market Context
Silver's price dynamics are uniquely complex due to its hybrid identity. It functions both as a precious metal, attracting safe-haven investment flows, and as an industrial commodity with significant applications in electronics, photovoltaics, and other sectors. This dual nature can amplify its price swings relative to gold, especially during sessions when interest rate expectations, equity market movements, and growth outlooks all shift simultaneously.
The recent pullback occurs within the context of a market that had been stretched by a powerful rally. Silver reached an all-time high of $121.60 on January 29, following an extraordinary 147% surge in 2025. According to a recent projection from The Silver Institute, global silver demand is expected to hold steady in 2026. The group anticipates firmer retail investment demand will offset softer appetite from industrial, jewelry, and silverware sectors. Notably, the institute forecasts the market will face its sixth consecutive annual structural deficit, estimated at roughly 67 million ounces.
The immediate future for silver prices hinges on the upcoming inflation data. A softer-than-expected CPI reading could quickly revive wagers on Fed rate cuts, potentially luring buyers back into the market. Conversely, a firmer inflation number could reinforce the narrative of higher-for-longer interest rates. This scenario would likely push real yields higher and place pressure on leveraged positions in non-yielding assets like silver, potentially extending the current correction.
