Shares of the iShares Silver Trust plunged 3.5% to $63.77 on April 7 as President Trump's 8 p.m. ET deadline for Iran to reopen the Strait of Hormuz sent oil surging and triggered a broad market selloff that dragged precious metals down with equities. Trump doubled down on his threat to destroy Iran's civilian infrastructure if the Strait isn't reopened, vowing to "decimate every bridge and power plant in Iran within four hours." SLV, which holds over 491 million ounces of physical silver, is now down roughly 6.4% from its April 1 close of $68.14.
Oil Above $112 Is Poisoning the Rate Outlook for Silver
WTI crude closed at $112.41 per barrel , and surging energy prices are pushing markets to consider that the Fed's next move could be a rate hike — futures traders priced in a 52% probability of an increase by year-end, the first time it crossed the 50% threshold.
Cleveland Fed President Beth Hammack said Monday a rate hike "could be needed" if inflation stays above the 2% target. Higher interest rates hurt silver because the metal pays no income, making it less attractive relative to bonds. Economists forecast annual inflation jumping to 3.1% from 2.4%, with the Cleveland Fed's own estimates showing it could reach 3.5% in April.
Forced Selling Is Overwhelming Safe-Haven Demand Silver's paradox: a crisis that should boost safe havens is instead crushing them. Analysts have noted that leveraged investors getting wiped out are forced to sell other assets to cover margin calls — essentially, investors in falling stocks must raise cash by dumping whatever is liquid, including silver ETFs. In silver, futures and ETF volumes fell even as prices dropped — a sign that liquidity was thinning precisely when it was needed most.
The Strait Crisis Could Get Worse Before It Gets Better
The Strait closure has triggered the largest oil supply disruption in history.
Analyst Marko Papic of BCA Research estimates the world has lost 4.5–5 million barrels per day, a figure he expects to double by mid-April, "becoming the largest loss of crude supply." If oil breaks $150 — a scenario some analysts have predicted — the stagflation squeeze on silver intensifies.
SLV Is Down 42% From Its 52-Week High, But Technicals Flash Caution
SLV's 52-week range spans from $26.96 to $109.83 , and multiple analysts hold negative near-term evaluations, expecting continued weakness. The critical question for holders: does silver revert to its traditional crisis bid once forced selling ebbs, or does a potential rate-hike cycle keep a ceiling on prices? With Trump's deadline hours away, the answer may hinge on tonight's headlines.