Shares of the iShares Silver Trust plunged to $64.68 on March 19 — extending a brutal 15.4% drop from last week's $76.48 — as a one-two punch of scorching wholesale inflation data and a cautious Federal Reserve crushed investor appetite for metals that don't pay interest.

  • Producer Prices Surged at Twice the Expected Rate, and That Was Before the Oil Shock Worsened. U.S. producer prices rose more than twice as fast as expected in February, with the PPI climbing 0.7% versus the 0.3% economists had forecast.

On a 12-month basis, PPI inflation hit 3.4%, the hottest reading since February 2025. For SLV holders, this matters because rising wholesale costs signal that consumer inflation isn't fading — and that keeps the Fed from cutting rates, which would otherwise make zero-yielding silver more attractive relative to bonds.

  • The Fed Held Rates Steady and Raised Its Own Inflation Forecast. The FOMC voted 11-1 to keep the federal funds rate at 3.5%–3.75%.

Both headline and core PCE inflation forecasts for 2026 were revised up to 2.7%, from December's projections of 2.4% and 2.5%.

The dot plot penciled in just one cut for 2026 , and futures traders pushed out the next rate cut to at least December. Higher-for-longer rates mean Treasury bonds keep offering real competition to silver, which generates no income for holders.

  • Silver Is Being Squeezed from Both Sides: A Stronger Dollar and ETF Outflows. Silver dropped more than 5% during a volatile session, breaching the $80 level as investors grappled with core inflation at a three-year high.

Silver-backed ETFs saw outflows of over 1.5 million ounces in just two weeks , a sign that institutional money is choosing cash and yields over physical metal. In this high-yield environment, silver must compete with 10-year Treasuries flirting with the 4.0% mark.

  • Industrial Demand Provides a Floor — But It's Not Enough Right Now. Structural demand from solar panels (expected to consume over 120 million ounces this year) and AI servers that use 3.5x more silver than traditional hardware has created a demand floor that didn't exist in prior cycles.

Silver supply deficits are projected for a sixth consecutive year. Yet as Powell conceded the Fed is "not making as much progress on inflation as it had hoped," macro headwinds are overpowering the industrial story. Until rate-cut expectations firm up, SLV faces a painful tug-of-war between long-term physical scarcity and short-term monetary gravity.