Image Source: Pixabay

The glittering rally that defined the start of the year for silver has hit a sudden and sharp wall of resistance.

As of February 2, 2026, the white metal is trading near $77 per ounce — a “staggering” retreat from the historic highs above $120 seen just last week.

This rapid descent, which included a historic 26% single-day plunge, has left investors wondering if the precious metals bull market has permanently derailed.

According to Katie Stockton, founder of Fairlead Strategies, this volatility is merely the beginning of a cooling-off period.

In a recent interview with CNBC, Stockton warned the metal is likely entering an extended phase of “corrective action” that could persist for another eight to nine weeks.

What to expect from silver in the coming weeks

Stockton’s assessment is rooted in the “exhaustion” often seen after parabolic price moves.

Silver’s climb throughout January was nothing short of spectacular, but Stockton says such vertical trajectories rarely resolve with a gentle landing. Instead, they require time to digest gains.

According to her, while the initial “down draft” was sharp and painful for latecomers to the trade, the next two months will likely be characterised by a “sideways to lower” grind.

This duration is necessary to “reset” technical indicators and wash out the speculative “froth” that accumulated during the peak of the frenzy.

What it suggests is: the worst of the vertical drop might be over, but the “V-shaped” recovery many hope for is unlikely.

The market needs to establish a new base of support before any sustainable uptrend can resume — meaning patience will be the most valuable asset for silver bulls in the coming weeks, Stockton noted.

Macro headwinds and the ‘Warsh’ factor

Beyond the charts, several fundamental shifts are contributing to Stockton’s cautious view.

A key catalyst for the recent sell-off was the nomination of “Kevin Warsh” as the next chairman of the Federal Reserve.  

Warsh is widely perceived by the markets as a “hawkish” pick – someone likely to favour tighter monetary policy and higher interest rates.

This perception has breathed new life into the US dollar and sent Treasury yields higher, which historically creates a difficult environment for non-yielding assets like silver.

When the dollar strengthens, silver becomes more expensive for international buyers, naturally dampening demand.

Additionally, the “debasement trade” – which saw investors flocking to silver as a hedge against rising government debt – has hit a temporary saturation point.

As profit-taking becomes the dominant theme, the lack of immediate bullish catalysts means the metal is vulnerable to further sliding.

Stockton highlighted that sentiment is currently struggling across the board, noting it “isn’t great right now” due to external volatility and a shift in how investors are perceiving risk assets versus safe havens.

How to play silver moving forward?

As we look toward the spring, the “corrective action” Stockton describes will likely be a period of consolidation.

This doesn’t necessarily mean silver is headed back to the $20 range – but it does mean the era of easy, daily double-digit gains has passed for now.

Experts are keeping a close eye on the $70 to $75 range as potential support levels where the metal might finally find its footing.

If Stockton’s timeline holds, a clear directional breakout is rather unlikely until late March or early April.

Ultimately, this phase should be viewed as a “market reset”. While the long-term industrial demand for silver – driven by the solar and EV sectors – remains “structurally sound”, the financial side of the trade needs to find equilibrium.

For long-term investors, this eight-week window may eventually be seen as a healthy pause that prevented a total market bubble.

For now, however, the message from the charts is clear: the silver rush has paused, and the era of “sideways to lower” has officially begun.

More By This Author:

What Kevin Warsh’s Fed Nomination Could Mean For Stocks, Crypto, And Risk Assets
Apple Stock Is A Raging Buy After Q1 Earnings
Mastercard Stock Is Expensive, But Q4 Earnings Still Warrant A Buy