The silver market is enduring one of its most severe corrections this year, marking a third straight week of losses. In a dramatic four-session sell-off, prices plunged nearly 20% from the weekly peak. This downturn was primarily triggered by a surprisingly hawkish shift from the U.S. Federal Reserve, which caught investors off guard.
A Challenging Macroeconomic Backdrop
During its Wednesday meeting, the Federal Reserve revised its interest rate cut projections for 2026 downward, signaling only one reduction instead of the previously anticipated two. Policymakers cited persistent inflationary pressures stemming from volatility in the Strait of Hormuz. This stance propelled the U.S. dollar index higher and pushed the yield on 10-year Treasury notes to 4.25%. These developments created a dual headwind for non-yielding precious metals. Market expectations for the first Fed rate cut have now been pushed out to 2027. Meanwhile, traders are pricing in two potential rate hikes from both the European Central Bank and the Bank of England later this year.
By Friday morning, silver was trading at $72.10 per ounce, its lowest level since early February.
Related Assets Feel the Strain
The sell-off extended well beyond physical metal. The ProShares Ultra Silver ETF shed approximately 20% in pre-market trading. Both the iShares Silver Trust and the Aberdeen Physical Silver Shares ETF declined more than 4%. Major mining companies were also hit hard: First Majestic Silver dropped over 6%, while Coeur Mining fell more than 5%. In Europe, the Stoxx Europe Basic Resources Index lost 6%.
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Silver’s dual nature as both a monetary asset and an industrial commodity typically amplifies gold’s price movements in both directions. This dynamic was evident as gold fell 6% over two sessions, a move that silver magnified into its near-20% slide from the weekly high. On a weekly basis, gold is headed for a loss of roughly 9%, with silver poised for a decline exceeding 10%.
Technical Support at a Critical Juncture
From a chart perspective, silver is testing a crucial technical level. The $70 per ounce mark has acted as a reliable support floor twice already this year and is now under pressure once more. A sustained break below this level would open the path toward the 200-day moving average near $62, with the October 2025 highs around $55 potentially coming into view afterward.
The Fed’s meeting minutes revealed a committee deeply concerned about “cost-push inflation” driven by geopolitical instability and structurally rising energy costs. As long as these pressures persist, the environment for precious metals is likely to remain challenging. This is despite last year’s impressive rallies, which saw silver surge by 135%.
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