Silver prices have gone up and are now around $80.80 per troy ounce. This increase is due to expectations that Japan will adopt expansionary fiscal policies following its recent election. Demand for silver remains steady, even amid ongoing US-Iran talks that aim to reduce tensions. Key US economic reports will influence the Federal Reserve’s interest rate decisions. The January jobs report is expected to show an increase of 70,000 jobs, keeping the Unemployment Rate steady at 4.4%. Currently, the market predicts that the Fed will maintain interest rates in March, with possible cuts later on.

Silver Benefits From Changing Policies

Silver is benefiting from Japan’s election, which may lead to policies that raise inflation expectations. It also serves as a safe-haven investment during geopolitical uncertainties, such as tensions with Iran. Industrial demand for silver, due to its conductive properties, also plays a role in its pricing. Typically, silver prices align with gold prices, influenced by the Gold/Silver ratio. Factors like geopolitical events, interest rates, and the strength of the US Dollar significantly affect silver’s market value. Additionally, silver’s abundant mining supply and its use in electronics and jewelry impact its market dynamics. Reflecting on last year’s analysis, we noted Japan-led reflationary trades and early optimism about potential Federal Reserve rate cuts. Now, on February 9, 2026, circumstances have changed, and we need to modify our strategies. Key factors still include interest rate expectations and silver’s dual role as both a monetary and industrial metal. The earlier expectation for Fed rate cuts, a major topic in 2025, is now in question due to robust economic data. The latest jobs report revealed that the economy added 353,000 jobs, significantly surpassing expectations and keeping the unemployment rate low at 3.7%. This strong labor market might lead the Fed to delay rate cuts, putting upward pressure on the dollar and creating challenges for silver prices in the short term.

Global Inflation and Industrial Demand

Last year, we monitored Japan’s fiscal policy for signs of inflation. Now, persistent inflation appears to be a global issue, with the latest US CPI data around 3.1%. This situation reinforces silver’s traditional role as a hedge against inflation. Thus, any price drops due to changing Fed timelines could offer buying opportunities for those preparing for long-term currency debasement. Industrial demand is now even more crucial than it was in 2025. Driven by the global energy transition, demand for silver is expected to hit a record 690 million ounces this year, primarily due to significant growth in solar panel manufacturing. This trend provides a solid foundation for silver prices, suggesting that long-term call options or physical accumulation could be wise strategies. The safe-haven demand we mentioned last year regarding US-Iran talks still holds relevance, though the focus is now broader. Ongoing geopolitical tensions in various key regions continue to support precious metals. We should keep an eye on these areas, as any escalation could lead to sharp, short-term increases in silver. Lastly, let’s monitor the Gold/Silver ratio, which is currently high at 90. Historically, a ratio at this level indicates that silver may be undervalued compared to gold. This suggests that favoring silver trades over gold could be a smart strategy in the coming weeks. Create your live VT Markets account and start trading now.

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