Shares of the iShares Silver Trust cratered to $64.28 on Thursday, shedding 6.4% in a single session, as a brutal one-two punch of scorching inflation data and rising government bond yields sent investors fleeing from silver. Gold and silver joined a broad sell-off Thursday, with the metals shedding around 5% and 10%, respectively, as fears about the Iran war and inflation gripped global markets. For SLV holders, the question is no longer when the next rally comes — it's whether the macro environment has fundamentally turned against them.
• Wholesale Prices Came in Far Hotter Than Anyone Expected. The Producer Price Index surged by 0.7% month-over-month in February, significantly outpacing economist forecasts of 0.3%.
On a 12-month basis, headline PPI inflation hit 3.4%, the most since February 2025, while core stood at 3.9%. That's nearly double the Fed's 2% target — and it means the central bank has no room to cut rates soon. Since silver pays no interest or dividends, higher rates make it less attractive compared to bonds that now pay more.
• Treasury Yields Spiked, Making Silver a Harder Sell. Treasury yields rose Wednesday as traders digested hotter-than-expected inflation data; the benchmark 10-year yield traded up more than 6 basis points at 4.265%, while the 2-year jumped over 10 basis points to 3.775%. When government bonds offer fatter returns, money flows out of assets like silver that generate zero income. SLV has now fallen 16% from its March 12 close of $76.48.
• The Fed Isn't Coming to the Rescue Anytime Soon. Futures traders pushed out the next Fed interest rate cut until at least December.
One investment officer said, "We'll be lucky to get even one rate cut this year." With rates frozen at 3.50%–3.75%, the cost of holding a non-yielding asset stays painfully high.
• War and Oil Add Fuel — But Not the Kind Silver Needs. Investors are monitoring the ongoing U.S.-Iran war as the conflict fuels concerns about an energy shock adding inflationary pressure; oil and gas prices spiked after energy facilities in Iran and Qatar were hit. Paradoxically, this hurts silver: higher energy costs feed inflation expectations, which push yields up further, which punishes non-yielding metals. Silver dropped sharply due to rising crude oil prices, a strong US dollar, and uncertainty in industrial demand.
The bottom line: SLV's 133% one-year return is evaporating fast. Until inflation cools or the Fed pivots, silver faces a hostile macro environment with no obvious catalyst for recovery.