PSLV Dips as Silver Rout Jitters U.S. Traders Pre-Open
In premarket trading on February 2, 2026, the Sprott Physical Silver Trust (PSLV) experienced a decline, continuing a trend that began the previous Friday. This downturn followed a significant drop in silver prices, spurred by rising future margins and shifting market sentiments. As traders prepare for important economic reports, jitters in the silver market are palpable.
Decline in Silver Prices and Trust Units
During the premarket session, PSLV units fell by 3.1% to $25.59. This decline came after a sharp 27.2% plunge on Friday, bringing the closing price to $26.41. The overall silver market continues to face turbulence, with spot silver down 1.1% to $83.73 per ounce, after having plummeted as much as 15% in less than two days.
Market Influences and Reactions
- The decline in silver prices is largely attributed to the CME Group’s decision to raise margin requirements for futures positions.
- Market analysts, including Zain Vawda from MarketPulse by OANDA, noted that this creates a cycle of selling pressure.
- On January 29, silver hit a peak price of $121.64 per ounce, marking a two-day reversal of its remarkable rally.
Investment analysts suspect that the recent volatility has been exacerbated by political developments. Following President Donald Trump’s nomination of Kevin Warsh to lead the Federal Reserve, traders have adjusted their interest-rate predictions. Vivek Dhar of the Commonwealth Bank of Australia mentioned that this news has made investors perceive Warsh as a more hawkish figure, contributing to the strengthening of the dollar and additional selling pressure on commodities.
Silver Holdings and Market Sentiment
Sprott Physical Silver Trust is a closed-end fund that holds fully allocated silver bars, with its trading price sometimes diverging from its net asset value (NAV). As of January 30, the NAV per unit was reported at $29.15. However, following the recent selloff, the units closed at a discount of approximately 9.4% relative to NAV.
According to Sprott, the trust holds about 217.7 million ounces of silver, securely stored at the Royal Canadian Mint and listed on NYSE Arca.
Wider Market Reactions
- Other silver-backed products also saw declines, with the iShares Silver Trust at $73.73 and the abrdn Physical Silver Shares ETF at $77.50 in premarket trading.
- The broader market felt the impact as U.S. stock index futures fell alongside mining stocks amid silver’s descent.
Market analysts are monitoring the situation closely as thin liquidity and increased sensitivity to macroeconomic news lead to significant repositioning in trades. Premarket trading remains unpredictable, and rising margin requirements could trigger further selling, negatively impacting silver-linked investment funds.
Upcoming Economic Data Releases
Attention is turning to key economic reports, including:
- Institute for Supply Management’s manufacturing PMI, scheduled for 10:00 a.m. ET today.
- U.S. Bureau of Labor Statistics’ release of the January 2026 Employment Situation report at 8:30 a.m. ET on February 6.
With valuable data on the horizon, traders are preparing for potential market shifts in response to these developments.
