Silver Has Been Falling, but Here's Why It May Still End Up Soaring Back Higher Later This Year

Why It Matters

Fed leadership uncertainty can revive precious‑metal buying as investors seek safety, potentially lifting silver and related ETFs. A rebound would provide portfolio diversification and hedge against macroeconomic turbulence.

Key Takeaways

• Silver fell 35% from 52‑week high after Fed chair announcement.
• Fed leadership uncertainty could revive safe‑haven demand for silver.
• iShares Silver Trust (SLV) up 3% YTD, trading near 50‑day average.
• SLV’s 12‑month return exceeds 140%, offering hedge potential.
• Analysts remain cautious; SLV not listed among top‑10 recommended stocks.

Pulse Analysis

The Federal Reserve’s leadership transition has become a catalyst for precious‑metal markets. When President Trump announced Kevin Warsh as the incoming chair, the dollar rallied and silver plunged, reflecting reduced demand for safe‑haven assets. However, the Justice Department’s ongoing investigation into current chair Jerome Powell adds a layer of political risk. Should the confirmation process stall, market participants may once again turn to silver as a hedge against policy uncertainty and potential inflationary pressures.

Silver’s price trajectory this year illustrates the metal’s volatility. After breaching $121 in early January, it has retreated to the high $70s, a 35% decline from its 52‑week high. The iShares Silver Trust (SLV), the most liquid silver ETF, mirrors this movement but remains modestly positive for the calendar year, up about 3% and trading near its 50‑day moving average. Over the past twelve months, SLV has delivered a 140% total return, outpacing many equity benchmarks, which underscores its appeal as a diversification tool despite short‑term price swings.

From an investment standpoint, the current environment presents both opportunity and caution. While SLV’s recent price stability and strong long‑term return suggest a lower‑risk entry point, the fund was omitted from Motley Fool’s top‑10 stock picks, indicating analyst skepticism about near‑term upside. Investors should weigh the metal’s safe‑haven attributes against potential Fed‑driven volatility, and consider allocating a modest portion of their portfolio to SLV as a hedge rather than a core growth driver. This balanced approach can protect against macro shocks while preserving upside potential if silver rallies later in the year.