Silver Bounces Off $74 but Faces a 13% Monthly Drop

Silver’s intraday recovery from session lows near $74.57 masks a brutal month of underperformance against gold, with the gold/silver ratio compressing to 65.3 and raising questions about whether the white metal can hold its footing.

What to know

Silver traded in a wide $74.57–$78.42 daily range on February 16, bouncing off lows but still down nearly 13% over the past month.
Gold is holding firm above $5,000/oz with a 9.2% monthly gain, while silver has moved sharply in the opposite direction - widening the performance gap between the two metals.
USD/JPY finding support and the FTSE 100 approaching record highs suggest risk appetite is intact, yet silver has failed to benefit from the broader bullish mood.

What happened

Silver staged a bounce during Monday’s session, recovering from an intraday low of $74.57 to trade around $76.77 - a nearly 3% swing from the bottom of the day’s range. The move looks constructive on a chart, but the monthly picture is far less encouraging. The silver price has shed $11.33 over the past month, a decline of almost 13%, and is down 4.3% on the week alone.

That stands in stark contrast to gold, which is comfortably above $5,000/oz and has gained over 9% in the same monthly window. The gold/silver ratio sits at 65.3, which historically signals silver is undervalued relative to gold - but that ratio has been stubbornly elevated, and silver bulls have been waiting for a mean-reversion trade that keeps not arriving.

Broader risk markets are painting a different picture. The FTSE 100 is flirting with record highs, and USD/JPY has found a technical support level that’s keeping the dollar bid against the yen. Both moves suggest healthy risk appetite - the kind of environment where silver, with its industrial demand profile, should theoretically outperform gold, not lag it.

Who’s involved

The divergence between gold and silver points to two distinct buyer pools operating with different motivations. Gold’s relentless bid above $5,000 - it touched $5,074 intraday and has printed as high as $5,586 this month - is being driven by central bank accumulation and safe-haven flows that have little interest in silver’s industrial narrative.

Silver is caught between speculative positioning and physical demand dynamics. Managed money positioning in silver futures has been trimmed over recent weeks, and the bounce from $74.57 has the hallmarks of short-covering rather than fresh longs entering the market. Industrial buyers, particularly in solar and electronics, remain price-sensitive at these levels and are unlikely to chase a rally without clearer macro signals.

Currency traders are also a factor. The USD/JPY support level is keeping the dollar relatively firm, which acts as a headwind for dollar-denominated precious metals. A Fed Bowman speech later today could shift the tone - any hawkish lean would pressure silver further, while dovish signals could provide the catalyst for a more sustained recovery.

Why it matters

Silver’s 13% monthly drawdown while gold rallies 9% is one of the widest short-term performance gaps in recent memory. The gold/silver ratio at 65.3 is below its long-term average but well above the sub-50 levels that silver bulls target during full-blown precious metals rallies. In previous cycles - notably 2020 and 2011 - silver’s explosive catch-up moves only materialized after gold had consolidated and the ratio stretched beyond 80. We’re not there yet, which suggests the current divergence could widen further before it snaps back.

The FTSE 100’s strength and resilient equity markets globally also complicate the picture. If risk appetite stays elevated, silver’s industrial demand story should eventually provide support. But if the equity rally is masking underlying fragility - and the upcoming EU industrial production data could test that thesis - silver may find itself without either a safe-haven or a growth bid.

What to watch

The $74.50 level is the immediate line in the sand. A break below would open up a move toward $72, which was the January support zone. On the upside, silver needs to reclaim $78.50 - the top of today’s range - to signal any meaningful shift in momentum. Fed Governor Bowman’s speech today is worth monitoring for any rate-path signals. EU and Japanese industrial production figures releasing this week will test the global growth narrative that silver’s industrial demand depends on, and the gold/silver ratio above 68 would signal further silver weakness while a drop below 62 could mark the start of a catch-up trade. This article is for informational purposes only and does not constitute financial advice. Always do your own research before making investment decisions.