Shares of iShares Silver Trust dropped 3.4% to $47.40 as silver futures buckled under the weight of rising long-term Treasury yields and persistent expectations that the Federal Reserve may not be done raising interest rates. The move marks SLV's sharpest single-session decline in weeks and pushes the fund well below a trading range that had held since late October. Silver Sinks 3.4% as Rate-Hike Specter Haunts Precious Metals: Is SLV's Structural Bull Case Starting to Crack?
Shares tumbled as silver futures slid to near one-year lows, dragging iShares Silver Trust down $1.66 to $47.40 in a sell-off fueled by stubborn Treasury yields and renewed fears the Federal Reserve isn't done tightening. COMEX gold and silver futures fell to their lowest levels in nearly a year on Friday, with silver futures dropping to $49.66 per ounce — the lowest since November 2025. For SLV holders, the question is whether a powerful long-term supply story can survive a rate environment turning hostile.
Two Fed Dissenters Signal More Pain Ahead for Non-Yielding Assets
The Fed voted to keep its overnight rate at 3.75%–4.00%, but two FOMC voters dissented, and the post-meeting statement warned that inflation "remains elevated."
Barclays now sees the Fed hiking in both December and January as inflation pressures persist.
Silver pays no income, making price appreciation the sole source of returns — so every additional rate hike raises the opportunity cost of owning it versus a Treasury bill yielding above 4%. That math is punishing SLV today and could keep a lid on any rebound if December tightening materializes.
Five-Percent Yields Are Kryptonite for Silver
The 10-year Treasury yield hovered around 5%, holding steady at 4.93% as of October 30.
Over the past year, the 10-year yield has risen roughly 25.6%. Higher long-term rates increase borrowing costs economy-wide and pull speculative capital away from commodities. COMEX silver futures open interest has collapsed 41% from a year ago , a clear sign that speculators and physical buyers alike are stepping back.
A Structural Deficit Offers a Floor — but Not a Trampoline
The silver market is expected to post a sixth consecutive annual deficit of roughly 46 million ounces in 2026.
Industrial demand is forecast to decline by 3% to about 640 million ounces, yet remains well above pre-pandemic levels.
Resilience in data centers, electrification, and EV manufacturing is partially offsetting weaker solar-panel demand. The deficit means above-ground inventories keep shrinking, which historically supports prices — but only once the rate headwind fades.
What Shareholders Should Watch Next
The December Fed meeting is now the pivotal event. If the central bank hikes again, SLV faces another leg down as real yields climb. Conversely, any softening in inflation data could break the Treasury-yield stranglehold and re-ignite silver's supply-deficit rally. Until then, the trade-off is stark: long-term fundamentals remain tight, but short-term macro gravity is pulling hard in the other direction.