Trump’s silver bullet: target achieved

XAG/USD

Key zone: 71.5000 - 81.5000

Buy: 82.5000 (on a strong positive foundation) ; target 87.50-91.50; StopLoss 81.7000

Sell: 70.5000 (on a confident breakout of the 71.0000 level) ; target 63.50-60.00; StopLoss 71.3000

It is assumed that the main trigger of the market hysteria was the nomination of Kevin Warsh for the position of Fed Chair. The market views him as an active “hawk” and a disciplined “friend” of Trump, so the reaction was quite illustrative, as investors are used to a soft monetary policy.

• Overbought conditions had long warned about a reversal, but the market showed how quickly a scenario that almost nobody believed in can materialize. Those who got carried away by the rally in silver and gold ended up in losses. Those who had proper protection kept their profits. Those who managed to reverse their positions made money.
• Currencies went through the shock relatively calmly; gold and silver suffered the most (a classic “blow-off top”) — drops of 16% and 39% respectively, while cryptocurrencies continue to fall.
• High-leverage positions were hit on a massive scale. At the moment when it became fashionable in the trading community to brag about silver holdings, a market correction became inevitable. Warsh simply became a convenient excuse for profit-taking in the overheated trade on dollar debasement (the debasement trade).

Those who trade purely on news were in real shock: the market is collapsing, we look for the news that caused it — and there is none. We believe that the appointment of a new Fed Chair (which has not even happened yet!) is only a pretext. The real reason is a purely technical decision by CME Group (the COMEX exchange) regarding changes in margin calculation rules for gold and silver contracts.

Let us recall:

Starting from January 13, 2026, CME changed margin requirements for futures on gold, silver, platinum, and palladium from fixed dollar amounts to a percentage of the notional value. Banks and brokers demanded real cash as collateral from everyone who carelessly chose to buy metals with leverage.

The technical increase in margins simply reduces leverage: traders need more capital to control the same contract size. Margin on gold is set at 5%, and on silver at 9%. Similar percentage calculations apply to platinum and palladium.

The higher the prices of gold and silver, the more margin those holding short positions must post. This means that selling metals has become much more “expensive”. Spot traders with excessive leverage lose money faster than they generate high volatility. Forced covering = higher volatility.

Then everything is simple: when the price of your key asset drops sharply, trying to compensate for losses, a trader starts selling other high-quality stocks and assets from the portfolio — simply to save capital.

And by the way, the idea of a “technological silver shortage” is just a standard market manipulation. There is no such shortage on the market that could justify prices almost tripling.

As for the medium-term trend in metals, it is most likely broken. Although the long-term trend still has a chance to remain positive.

But if the market “continues to sell America”, the price of silver around $60 will not surprise anyone.

Another interesting question is: if speculators have left gold and silver, where has this capital moved to?

Apparently, no new free capital is visible in the market so far. It is simply that within the group of people who traded silver, funds were redistributed in some way. Some sold, others bought. And both sides prefer not to take risks for now.

So we act wisely and avoid unnecessary risks.

Profits to y’all!