Shares of the iShares Silver Trust jumped 5.4% to $66.37 in pre-market trading Wednesday after reports that the U.S. is seeking a month-long ceasefire in its war on Iran, and had sent a 15-point plan to Iran for discussion, raising hopes for a resumption of oil exports out of the Persian Gulf. The move reverses Monday's selloff but leaves SLV holders still sitting on enormous losses from a brutal two-month slide.
A Ceasefire Plan Sends Oil Down and Risk Assets Up
S&P 500 futures rose 0.7% through the Asia session, while Brent crude futures slid 5% to $99 a barrel. Falling oil eases inflation fears, which is good for silver — analysts say the biggest reason for the recent weakness in precious metals is the surge in crude oil prices, which has pushed up inflation expectations globally, reducing the chances of early rate cuts by the Federal Reserve. If oil stays below $100, the pressure on the Fed to keep rates high loosens, making non-yielding assets like silver more attractive.
Silver Is Still Down 40% From Its January High
SLV is trading around $64, down around 42% from its 52-week high of $109.83.
Over the last 10 days alone, the price decreased in 7 sessions, resulting in an overall decline of roughly 19%. Today's $3.42 bounce barely dents that crater. For SLV holders, the math is stark: the fund would need to rally another 65% just to revisit its January peak.
Geopolitical Rallies in Metals Have a History of Fading Fast
Gold surged during last year's 12-day conflict with Iran but lost those gains soon after a ceasefire was announced, highlighting how quickly safe-haven rallies can reverse. Silver's dual nature complicates the picture further — unlike gold, which is primarily a store of value, silver has dual roles as a precious metal investment and as an essential industrial input in electronics, solar panels, and batteries. A ceasefire could help the industrial side by calming supply chains, but it removes the crisis premium that drove silver above $90 earlier this month.
The Bigger Question: Where Does Silver Go If Peace Holds?
Precious metals have become the latest victim of rising inflation expectations and dimming hopes of rate cuts; gold and silver futures plummeted to one-month lows as the war in Iran crushed hopes for interest rate cuts anytime soon. If the ceasefire takes hold and oil continues falling, the Fed could resume easing — a genuinely bullish catalyst for silver. But the White House did not immediately respond to CNBC's request for additional information about the purported talks, and did not immediately respond to Iran's claim that no such negotiations are underway. Until verified, today's pop remains a headline trade, not a trend reversal.