Market Sentiment Analysis Silver XAG February 2026

Retail Sentiment and Positioning on X Social Platforms
The silver market in February 2026 is characterized by extreme emotional variance following a January price shock. Retail sentiment is currently divided between two distinct camps.

1. Buy the Dip Mentality
Strong retail conviction persists among proponents of the SilverSqueeze and XAG hashtags. This group views the recent drop from the January high of 121.67 down to the 70 to 80 dollar range as a generational buying opportunity. The narrative on X focuses on the 10 dollar premium of Shanghai silver over Western spot prices, with retail traders arguing that the paper price is a mathematical fiction disconnected from physical reality. There is significant chatter regarding a cash only market phase as margin requirements on COMEX have been hiked to 18 percent.
2. Bullish Exhaustion
A growing segment of the retail community shows signs of exhaustion. This is evidenced by the slowing demand for physical coins and bars as reported by bullion dealers. The 35 percent intraday flash crash on January 30 has left many leveraged retail participants liquidated. Technical analysts on social platforms are highlighting the 89 to 92 dollar pivot area as a site of bull failure. If silver fails to breach this level, sentiment suggests a potential deeper correction toward 60 dollars.

Physical Delivery Stress and Exchange Inventory Depletions
Data from February 2026 indicates a severe structural tightening in the physical silver supply chain.

COMEX Inventory Status
As of February 11 2026 COMEX registered silver inventories fell below the critical 100 million ounce psychological threshold to approximately 98.1 million ounces. Daily withdrawals are averaging roughly 785,000 ounces. Market participants are monitoring February 27, the First Notice Day for March futures, as a potential breaking point. Open interest stands at over 400 million ounces, creating a coverage ratio where only 24 percent of contracts are backed by available physical metal.

Shanghai Futures Exchange SHFE
SHFE inventories reached a near 10 year low of 318 tonnes on February 9. While a minor uptick to 353 tonnes was recorded by mid month, stockpiles remain down 88 percent from 2021 peaks. The depletion is attributed to heavy exports to London in 2025 and domestic Chinese investors engaging in a flight to physical assets due to banking instability.

Silver Gold Ratio and Market Dynamics
The Silver Gold Ratio is a focal point for retail traders seeking a reversion to mean. After silver outpaced gold in January, the ratio tightened significantly. Current analysis suggests that if gold holds the 5000 dollar level, retail investors expect silver to retest the 100 to 110 dollar range to maintain historical correlation.

Summary of Market Stress Indicators February 2026
Indicator: COMEX Registered Inventory. Status: Below 100 million ounces. Trend: Critical Depletion.
Indicator: SHFE Inventory. Status: 353 tonnes. Trend: 88 percent below peak.
Indicator: Retail Buying. Status: Slowing at dealers but high ETF interest. Trend: Transitioning to long term holding.
Indicator: Exchange Margins. Status: 18 percent. Trend: Forcing deleveraging.

The prevailing sentiment is that the physical market is attempting to seize control from paper pricing mechanisms, leading to a period of high volatility and localized supply strains.
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