Silver's Slip: Analyzing the iShares Silver Trust ETF's Recent Decline
32min read The iShares Silver Trust ETF (SLV) snapped its six-day winning streak in early April 2025, marking a sharp reversal in momentum for the silver market. After reaching a high of $30.63 on April 1, SLV plummeted to a low of $27.08 by April 4—a 11.6% drop over four trading days—before staging a partial recovery. This volatility underscores the complex interplay of macroeconomic, geopolitical, and market-specific factors shaping silver’s trajectory. Let’s dissect the drivers behind this decline and assess its implications for investors.
The Catalyst: Geopolitical Tensions and Tariff Uncertainty
The immediate trigger for SLV’s decline was U.S. President Donald Trump’s announcement of sweeping tariffs on April 2, 2025. A 10% global tariff and reciprocal levies on Chinese imports sent shockwaves through markets, with investors flocking to cash and safe havens. While silver typically benefits from such geopolitical instability, the tariff-induced fears of reduced industrial demand outweighed its safe-haven appeal. Analysts noted that tariffs on solar components—a key silver-intensive industry—could disrupt China’s 80% dominance in global solar panel production, raising concerns about “demand destruction” (see ).
Macroeconomic Pressures: Recession Fears and Fed Policy
The Atlanta Fed’s GDPNow model painted a grim picture, projecting a -2.8% GDP contraction for Q1 2025—a potential recession that could dampen industrial demand for silver. “A slowdown in EV sales and solar installations would directly hit silver’s industrial consumption,” warned Julia Khandoshko of Mind Money. Meanwhile, Federal Reserve policy remained a wildcard: while Fed Fund futures priced in an 87% chance of rate cuts by Q3 2025, the timing and magnitude of easing remained uncertain. A delayed dovish pivot could keep the U.S. dollar strong, pressuring silver prices further ().
Technical and Sentiment Factors
The SLV’s decline was amplified by profit-taking after a 17% rise in Q1 2025. Technical indicators showed overbought conditions (RSI near 70), and the $29.76 close on April 16 remained below its April 1 high, signaling unresolved bearish momentum. Additionally, the gold-silver ratio surged to 80:1—a 30% premium to its historical average—highlighting silver’s undervaluation relative to gold. Yet, this imbalance failed to reverse in April as investors prioritized gold’s stability during the tariff-driven “risk-off” environment.
Long-Term Fundamentals: A Bullish Undercurrent
Beneath the short-term volatility lies a compelling case for silver’s recovery. The Silver Institute reported a fifth consecutive annual supply deficit in 2024 (182 million ounces), driven by limited mining output and rising demand from renewable energy and electronics. UBS analysts maintained a bullish outlook, forecasting a 25.7% price surge to $38/oz by late 2025, citing structural factors like decarbonization and Fed rate cuts. “The April dip is a buying opportunity,” they argued, noting that physical demand (e.g., India’s 320 million oz import quota) and silver’s role as a “natural hedge” against inflation and dollar weakness remain intact.
Conclusion: Silver’s Duality—Risk vs. Reward
The iShares Silver Trust ETF’s recent stumble was a product of near-term headwinds: tariff-driven uncertainty, recession fears, and profit-taking. However, the broader fundamentals—persistent supply deficits, industrial demand growth from solar and EVs, and the potential for Fed easing—paint a bullish picture for silver’s long-term trajectory. Investors should view dips below $30 as strategic entry points, particularly as UBS’s $38 target implies a 25% upside from April lows. While geopolitical risks and Fed policy remain risks, silver’s dual role as both an industrial metal and safe haven ensures it will remain a key asset in portfolios navigating 2025’s turbulent markets.
