Sprott Physical-U (PHYS) Dips 0.07% Amid Macroeconomic Uncertainties, Fed Policy Shifts

The share price of Sprott Physical-U (PHYS) fell to its lowest level since September 2025 on September 9, 2025, with an intraday decline of 0.07%. The drop reflects a complex interplay of macroeconomic uncertainties, shifting investor sentiment, and structural dynamics in the commodities market.

Macroeconomic factors dominated the selloff, particularly evolving expectations around Federal Reserve policy. Mixed inflation signals—most recently a 2.7% year-over-year CPI reading—sparked speculation about potential rate cuts, which historically weaken the U.S. dollar and boost demand for non-yielding assets like gold and silver. However, a 0.36% rebound in the dollar index on the same day created short-term headwinds for PHYS, as dollar strength typically dampens appetite for commodities priced in USD. This conflicting landscape forced investors to recalibrate positions, amplifying downward pressure on the ETF.

Geopolitical tensions further compounded volatility. Trade disruptions linked to Trump-era tariffs on Russia and India introduced uncertainty into energy markets, indirectly affecting industrial demand for silver—a key component of PHYS’s underlying assets. These developments heightened sensitivity in silver markets, where demand is more closely tied to economic growth and technological transitions than gold. Energy price fluctuations, meanwhile, influenced production costs for silver, adding another layer of complexity to market dynamics.

Investor behavior underscored the ETF’s dual role as both a commodity play and a macroeconomic hedge. Sharp swings in equity markets, including a 20.8% drop in CoreWeave, highlighted shifting risk appetites, with capital increasingly flowing toward alternative assets. However, the broader recalibration of portfolios in response to inflation data, dollar strength, and geopolitical risks revealed a cautious stance. PHYS’s sensitivity to these factors—combined with its exposure to the inherently volatile silver market—magnified its recent decline.

The divergence between gold and silver also played a role. While gold’s surge to $3,600 in late August 2025 signaled strong inflation-hedging demand, silver’s smaller market size and industrial applications made it more susceptible to short-term fluctuations. December silver futures at $41.535 per ounce reflected cautious optimism, but structural challenges—including supply constraints and speculative trading—remained pressing concerns. These dynamics underscore the need for investors to differentiate between the two metals when allocating capital to PHYS.

Currency movements, particularly the dollar’s 0.36% rebound, added immediate pressure. A stronger dollar typically reduces demand for commodities by making them more expensive for foreign buyers, a well-documented inverse relationship. This effect was amplified by mixed inflation signals, which clouded the Fed’s policy trajectory and left investors navigating a landscape of uncertainty. The ETF’s price trajectory, therefore, became a barometer for broader macroeconomic recalibration.

Looking ahead, the long-term fundamentals for gold and silver remain intact, particularly with energy transitions expected to boost silver demand. However, near-term challenges—including geopolitical disruptions, currency fluctuations, and speculative trading—will likely continue to influence PHYS’s performance. Investors must balance exposure to inflation-hedging commodities with the inherent volatility of the silver and gold markets, remaining attuned to evolving policy signals and global economic shifts.