Shares of the iShares Silver Trust tumbled to $65.95 on May 4, dragged lower by a wave of risk-off selling after unverified reports of Iranian missile strikes on a U.S. Navy vessel sent crude oil prices spiking and investors scrambling for the exits — even in assets traditionally considered safe havens. SLV Drops 3.4% as Iran War Jitters Rattle Markets, but Can Silver's Dual Identity Save It From the Selloff?
Shares slid as geopolitical panic — not silver fundamentals — dragged the iShares Silver Trust down $2.34 to $65.95 on May 4, its sharpest single-day drop in weeks. The selloff came amid escalating US-Iran tensions, with oil prices whipsawing and risk-off sentiment sweeping across equities and commodities alike. For SLV holders, the question is whether a metal with no war-specific problem deserves a war-sized haircut.
• A War-Driven Oil Shock Is Punishing Everything, Including Silver
The ongoing conflict between Iran and the US-Israel coalition has closed the Strait of Hormuz, through which roughly 20% of the world's oil trade passes.
Brent crude has surged more than 55% since the war began, hitting nearly $120 a barrel at its peak.
Silver prices are down 18% since the beginning of the war, as energy supply disruptions have heightened inflation concerns, reinforcing expectations that central banks may keep interest rates elevated for longer. Higher-for-longer rates raise the cost of holding non-yielding assets like silver, making SLV less attractive regardless of the metal's fundamentals.
• Silver's Industrial Demand Story Is Intact but Under Pressure
Fresh earnings from AI hyperscalers extended the surge in AI infrastructure spending — $715 billion in AI capex has been penned by Meta, Alphabet, Microsoft, and Amazon, compared to $375 billion last year — a tailwind for silver's use in electronics. Yet PV silver demand fell 6% in 2025 and is forecast to fall another 19% in 2026 to around 151 million ounces , weakening a key pillar of the bull case. The silver market recorded its fifth consecutive annual deficit in 2025, totaling 40.3 million ounces, with another shortfall expected in 2026. Tight supply sets a floor, but it doesn't prevent short-term selloffs like today's.
• Peace Talks Could Snap Prices Back Fast — In Either Direction
Oil prices fell Friday after Iran sent an updated peace proposal to mediators in Pakistan , but Trump later said he was not satisfied with Iran's offer.
Analysts say any reopening of the Strait of Hormuz would likely trigger an immediate $10–$20 drop in crude prices , which could just as quickly reverse the risk-off trade crushing SLV. Investors are effectively betting on diplomacy.
• The Bigger Picture: Silver Isn't Cheap Anymore
Silver surged 147% in 2025 and hit an all-time high of $121/oz in January 2026.
Current institutional forecasts average around $79–$81/oz for 2026. At ~$75/oz spot, silver sits below consensus targets, suggesting upside if geopolitical noise fades. But today's drop is a reminder: in a market hostage to headline risk, even safe-haven assets aren't safe.